Resolution of Federal Tax Controversies by the Independent Office of Appeals, 3645-3665 [2025-00426]

Agencies

• Internal Revenue Service
• DEPARTMENT OF THE TREASURY

[Federal Register Volume 90, Number 9 (Wednesday, January 15, 2025)]
[Rules and Regulations]
[Pages 3645-3665]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-00426]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 301

[TD 10030]
RIN 1545-BP72


Resolution of Federal Tax Controversies by the Independent Office 
of Appeals

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final regulation.

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SUMMARY: This document contains final regulations that provide guidance 
on the resolution of Federal tax controversies by the IRS Independent 
Office of Appeals (Appeals) under the Taxpayer First Act of 2019 (TFA). 
The final regulations provide that while the Appeals resolution process 
is generally available to all taxpayers to resolve

[[Page 3646]]

Federal tax controversies, there are certain exceptions to 
consideration by Appeals. The final regulations also address certain 
procedural and timing rules that must be met before Appeals 
consideration is available. The regulations affect taxpayers requesting 
Appeals consideration of Federal tax controversies.

DATES: 
    Effective date: These regulations are effective on January 15, 
2025.
    Applicability date: The regulations in Sec. Sec.  301.7803-2 and 
301.7803-3 apply to all requests for consideration by Appeals that are 
received on or after February 14, 2025.

FOR FURTHER INFORMATION CONTACT: Joshua P. Hershman at (202) 317-4311 
(not a toll-free number).

SUPPLEMENTARY INFORMATION:

Authority

    This document contains amendments to the Procedure and 
Administration Regulations under 26 CFR part 301 to implement section 
7803(e) of the Internal Revenue Code (Code), which Congress enacted in 
the TFA (final regulations). The final regulations are issued under 
section 7805(a) of the Code, which expressly delegates to the Secretary 
of the Treasury or her delegate (Secretary) the authority to 
``prescribe all needful rules and regulations for the enforcement of 
[the Code], including all rules and regulations as may be necessary by 
reason of any alteration of law in relation to internal revenue.''

Background

    Section 7803(e)(3) provides that it is the function of Appeals to 
resolve Federal tax controversies without litigation on a basis that is 
fair and impartial to both the Government and the taxpayer, promotes a 
consistent application and interpretation of, and voluntary compliance 
with, the Federal tax laws, and enhances public confidence in the 
integrity and efficiency of the IRS. Section 7803(e)(4) states that the 
resolution process to resolve Federal tax controversies described in 
section 7803(e)(3) ``shall be generally available to all taxpayers.''
    On September 13, 2022, the Treasury Department and the IRS 
published in the Federal Register (87 FR 55934) a notice of proposed 
rulemaking (REG-125693-19) proposing amendments to implement section 
7803(e) (proposed regulations). The proposed regulations proposed to 
adopt the function of Appeals as stated in section 7803(e)(3) and that 
the Appeals resolution process is generally available to all taxpayers 
to resolve Federal tax controversies as stated in section 7803(e)(4). 
The proposed regulations defined what constitutes a Federal tax 
controversy involving disputes over administrative determinations made 
by the IRS and, consistent with the historical practice and functions 
of Appeals, listed certain additional topics involving disputes over 
administrative determinations by the IRS that are treated as Federal 
tax controversies. Proposed Sec.  301.7803-2(c)(1) through (24) also 
proposed an exclusive list of twenty-four exceptions to consideration 
of a Federal tax controversy by Appeals, almost all of which existed 
before the enactment of the TFA. This preamble refers to the exceptions 
in proposed Sec.  301.7803-2(c), such as proposed Sec.  301.7803-
2(c)(1), (2), and (3), for example, as ``Exception 1,'' ``Exception 
2,'' and ``Exception 3.''
    Additionally, the proposed regulations proposed certain procedural 
and timing rules that must be met before Appeals consideration is 
available: the originating IRS office must have completed its review; a 
taxpayer must have submitted the request for Appeals consideration in 
the prescribed time and manner; and Appeals must have had sufficient 
time remaining on the appropriate limitations period for it to consider 
the matter. Further, if a Federal tax controversy is eligible for 
consideration by Appeals and the procedural and timing requirements are 
followed, a taxpayer would generally have only one opportunity for 
Appeals consideration. The proposed regulations also proposed two 
special rules for docketed cases. First, if Appeals issued a notice of 
deficiency, notice of liability, or other determination, without having 
fully considered one or more issues because of an impending expiration 
of the statute of limitations on assessment, Appeals may choose to have 
the Office of Chief Counsel (Chief Counsel) return the case to Appeals 
for full consideration of the issue or issues once the case is docketed 
in the United States Tax Court (Tax Court). Second, Appeals and Chief 
Counsel may determine how settlement authority is transferred between 
the two offices. Similar prerequisites to Appeals consideration as 
those described in this paragraph existed before the enactment of the 
TFA.
    Besides soliciting public comments on the rules in the proposed 
regulations, the Treasury Department and the IRS also solicited public 
comments in the proposed regulations on whether certain exclusions from 
Appeals' consideration currently provided in the Internal Revenue 
Manual (IRM) relating to requests for relief under Sec. Sec.  301.9100-
1 through 301.9100-22 (9100 relief) and requests for a change in 
accounting method (CAM) should be included in the list of exceptions in 
the regulations.
    Lastly, the proposed regulations proposed requirements to implement 
section 7803(e)(5). Enacted by the TFA, section 7803(e)(5) requires the 
IRS to follow the special notification procedures set forth in section 
7803(e)(5) if a taxpayer who is in receipt of a notice of deficiency 
under section 6212 of the Code requests to have the Federal tax 
controversy referred to Appeals and that request is denied.
    The Summary of Comments and Explanation of Revisions of these final 
regulations summarizes the provisions of the proposed regulations, 
which are explained in greater detail in the preamble to the proposed 
regulations. In response to the proposed regulations, the Treasury 
Department and the IRS received fourteen comments. A public hearing was 
requested and held on November 29, 2022.
    After careful consideration of the comments and hearing testimony, 
the Treasury Department and the IRS adopt the proposed regulations, as 
modified by this Treasury decision, in response to such comments as 
described in the Summary of Comments and Explanation of Revisions. The 
final regulations also include minor typographical and editorial edits, 
including non-substantive clarifications, to the proposed regulations.

Summary of Comments and Explanation of Revisions

I. Proposed Sec.  301.7803-2

A. Intent of the TFA To Grant Authority To Make Exceptions
    Numerous comments addressed the scope of the proposed exceptions to 
Appeals consideration in proposed Sec.  301.7803-2(c) or the authority 
of the Treasury Department and the IRS to make exceptions that exclude 
or limit access to Appeals.
    Several comments agreed that the TFA generally authorizes the 
Treasury Department and the IRS to provide exceptions to Appeals 
consideration. A comment agreed that the statutory text and legislative 
history of the TFA confirm Congress did not intend for Appeals access 
to be universally available. This comment supported the proposed 
regulations' identification of particular situations in which Appeals 
access should not be available. While disagreeing with Exception 19 
(Challenges Alleging That a Treasury Regulation Is Invalid) and 
Exception 20 (Challenges Alleging That a Notice or Revenue Procedure Is 
Invalid) and exceptions for 9100 relief and CAMs, another comment 
generally agreed with

[[Page 3647]]

the Treasury Department and the IRS that not every case is appropriate 
for Appeals consideration. The comment also stated that the TFA did not 
require that the IRS grant all requests for Appeals to consider any 
dispute because the Secretary may provide exceptions to Appeals 
consideration. Another comment stated there was ``ample reason, rooted 
in logic and past practice, for the majority of [the] proposed 
exceptions.'' It opined that some of the proposed exceptions, which 
were not identified, were not necessary to the proper administration of 
the Appeals process or were not consistent with the statute's mandate 
that the Appeals process be generally available. Another comment stated 
that some of the historic exclusions in the proposed regulations should 
be accepted and specifically mentioned penalties and determinations 
under sections 6702 or 6682 of the Code. Other comments stated that the 
proposed exceptions or exceptions framework laid out in the proposed 
regulations generally ran afoul of the intent of the TFA by limiting 
access to Appeals, or that certain proposed exceptions such as 
Exception 18 (Challenges Alleging That a Statute Is Unconstitutional), 
Exception 19, and Exception 20 did so. These comments gave several 
reasons in support of their arguments, as described in greater detail 
in section I.D. of this Summary of Comments and Explanation of 
Revisions. Two comments claimed that providing exceptions to review by 
Appeals would deny taxpayers a statutory right to Appeals, and two 
comments claimed exceptions to review by Appeals would inappropriately 
restrict Appeals access and suggested the proposed regulations should 
instead expand Appeals access.
    As explained in more detail in section I.C. of the proposed 
regulations' Explanation of Provisions, Congress did not provide for an 
absolute right to administrative consideration by Appeals, which is 
reflected in the statute and the TFA's legislative history. Rather, 
Appeals review is ``generally available,'' under section 7803(e)(4) and 
the Treasury Department and the IRS may provide reasonable exceptions 
in their discretion, whether existing or new. In addition to this 
statutory language, TFA's legislative history also reflects the 
intention of Congress that the Treasury Department and the IRS retain 
their historical discretion to determine whether the resolution of 
particular types of disputes is appropriate for the Appeals resolution 
process, and for the IRS to retain the discretion to determine whether 
a particular Federal tax controversy is appropriate for the Appeals 
resolution process:

    Independent Appeals is intended to perform functions similar to 
those of the current Appeals. Independent Appeals is to resolve tax 
controversies and review administrative decisions of the IRS in a 
fair and impartial manner, for the purposes of enhancing public 
confidence, promoting voluntary compliance, and ensuring consistent 
application and interpretation of Federal tax laws. Resolution of 
tax controversies in this manner is generally available to all 
taxpayers, subject to reasonable exceptions that the Secretary may 
provide. Thus, cases of a type that are referred to Appeals under 
present law remain eligible for referral to Independent Appeals.

See H.R. Rep. No. 39, Part 1, 116th Cong., 1st Session (House TFA 
Report), 30-31 (2019) (emphasis added).
    Contrary to one comment's suggestion, the Committee reports for the 
IRS Restructuring and Reform Act of 1998, Public Law 105-206 (112 Stat. 
685, 689 (July 22, 1998)), and any earlier version of the TFA that 
Congress did not enact, are not informative when interpreting the TFA. 
The legislative history of the TFA reflects Congressional intent that 
the Treasury Department and the IRS retain their historical discretion 
to determine whether the resolution of particular types of disputes is 
appropriate for Appeals, and the discretion of the IRS to determine 
whether a particular Federal tax controversy is appropriate for the 
Appeals resolution process. See House TFA Report, at 29.
    Several comments expressed concern that excluding a matter from 
Appeals consideration adversely affects the independence or 
impartiality of Appeals. Some of the comments specifically asserted 
that prohibiting Appeals from considering validity challenges to a 
regulation, notice, or revenue procedure as set forth in Exception 19 
or Exception 20 undermines its independence. The Treasury Department 
and the IRS disagree with this comment. Exceptions from review by 
Appeals do not inhibit the independence or impartiality of Appeals for 
matters or issues under consideration. If a matter is not reviewed by 
Appeals, there is no independent analysis to be performed. Appeals 
still would be free to settle a Federal tax controversy that is 
referred to it using its own standards and an exception to review by 
Appeals would have no bearing on the cases or issues that are referred 
to Appeals.
    One comment opined that the proposed exceptions in general are not 
reasonable or narrowly construed. The Treasury Department and the IRS 
disagree with this comment. As reflected in the proposed regulations' 
Explanation of Provisions in section I.C., the proposed exceptions are 
narrowly tailored and are based on reasonable rationales. Additionally, 
the proposed regulations and these final regulations reinforce the 
statutory presumption that Federal tax controversies may be considered 
by Appeals and require a regulatory exception for consideration to be 
unavailable.
    The same comment suggested there would be no ``whipsaw'' if Appeals 
settles any of the cases or issues outlined in the proposed exceptions 
because Appeals settlements are not binding on any other taxpayer or on 
Chief Counsel's litigation position. It is unclear what is intended by 
this comment. The term whipsaw refers to the situation produced when 
the Government is subjected to conflicting claims of taxpayers. The 
issue of whipsaw has no bearing on the Appeals exceptions listed in the 
proposed regulations nor on the rationales set forth in the proposed 
regulations that support these exceptions and so the Treasury 
Department and the IRS do not agree that revisions to the proposed 
regulations are necessary.
    A few comments focused on costs and opined that Congress intended 
for Appeals to resolve Federal tax controversies without expensive 
litigation. A comment asserted the establishment of Appeals was an 
attempt by Congress to make resolving controversies less cost-
prohibitive for lower income individuals. Another comment stated the 
proposed regulations' approach granting exceptions to Appeals 
consideration would be a waste of resources of the Government and 
taxpayers. The Treasury Department and the IRS agree that part of 
Appeals' mission is to resolve Federal tax controversies without 
litigation, but do not agree that exceptions to review by Appeals will 
result in a waste of resources. There is no reason to assume that the 
cost to litigate a particular Federal tax controversy will 
significantly increase as a result of the proposed regulations, or that 
litigation expenses will increase at all in circumstances in which an 
exception existed before the TFA. Appeals consideration will still be 
available for most cases, which can be resolved without litigation (or 
without further litigation if the taxpayer has petitioned the Tax 
Court). The proposed regulations' procedural requirements, timing 
requirements, and almost all of the exceptions to consideration by

[[Page 3648]]

Appeals already exist in previously established guidance regarding 
Appeals. As in the past, the proposed exceptions are limited in number 
and scope. The vast majority of taxpayers, including low-income 
taxpayers, will have the opportunity to have Appeals consider their 
Federal tax controversies.
    Similarly, two comments asserted that Exception 18, Exception 19, 
and/or Exception 20 waste taxpayer and Government resources. As 
discussed in more detail in sections I.D.11.a. and 12. of this Summary 
of Comments and Explanation of Revisions, in contrast to a single 
decision by Appeals that is applicable and communicated only to one 
taxpayer, a final decision from a Federal court is publicly available 
and applied consistently to all taxpayers. As a result, these 
exceptions promote efficiency rather than wasting taxpayer and 
Government resources. Furthermore, even if Appeals were to review the 
matter covered by these exceptions, there is no guarantee that Appeals 
would settle or resolve it.
    One comment recommended that the Treasury Department and the IRS 
should take a conservative approach to Appeals exceptions because 
recent Supreme Court decisions such as CIC Services, LLC v. Internal 
Revenue Service, 593 U.S. 209 (2021) and Boechler, P.C. v. 
Commissioner, 596 U.S. 199 (2022) defined limits on the IRS's 
contentions concerning its prerogatives under the Administrative 
Procedure Act (APA), equitable tolling, and Tax Court jurisdiction. The 
Treasury Department and the IRS disagree with the premise of this 
comment that a more conservative approach is needed or that the 
referenced cases are relevant in construing section 7803(e). The 
exceptions in these regulations are reasonable and narrowly tailored to 
achieve their purposes. None of the cited cases addressed the meaning 
of section 7803(e) or the availability of Appeals review. Instead, 
these cases address different issues and have no bearing on these 
regulations.
    Another comment noted that litigation arguing that the TFA provides 
taxpayers with access to Appeals is pending in the Hancock and Rocky 
Branch cases in the United States Court of Appeals for the Eleventh 
Circuit (Eleventh Circuit), implying that the regulations should be 
withheld due to the litigation. The Treasury Department and the IRS 
disagree that these two cases serve to limit or prevent the publication 
of regulations. Neither case is pending any longer. In Hancock, the 
U.S. District Court for the Northern District of Georgia held that the 
taxpayer had no absolute right to Appeals consideration under the 
circumstances. The Eleventh Circuit upheld the decision on Anti-
Injunction Act grounds (see section 7421 of the Code), and the Supreme 
Court denied certiorari. See Hancock County Land Acquisitions LLC, et. 
al. v. United States, 553 F. Supp. 3d 1284, 1294 fn. 9 (N.D. Ga. 2021), 
aff'd 130 AFTR 2d 2022-5529 (11th Cir. Aug. 17, 2022), cert. denied 143 
S.Ct. 577 (January 9, 2023). Rocky Branch has facts similar to the 
facts in Hancock, and as in Hancock the Eleventh Circuit upheld the 
decision on Anti-Injunction grounds, and the Supreme Court denied 
certiorari. See Rocky Branch Timberlands LLC, et. al. v. United States, 
129 AFTR 2d 2022-2137 (N.D. Ga. 2022), aff'd 132 AFTR 2d 2023-5788 
(11th Cir. Sept. 6, 2023), cert. denied 144 S.Ct. 812 (Feb. 20, 2024).
    One comment asserted that some of the exceptions in the proposed 
regulations, in particular, Exception 3 (Whistleblower Awards); 
Exception 4 (Administrative Determinations Made by Other Agencies); 
Exception 7 (Denial of Access Under the Privacy Act); and Exception 14 
(Authority Over the Matter Rests With Another Office) leave a taxpayer 
without any administrative recourse. The comment suggested an 
interagency discussion over how and whether administrative appeals 
processes, whether residing in the IRS Independent Office of Appeals or 
outside of the IRS, could be developed for these types of cases. The 
Treasury Department and the IRS agree with the comment's premise that 
the language of section 7803(e) does not cover Exception 3, Exception 
4, and Exception 7, or cover Exception 14 with respect to referrals to 
the Department of Justice (Justice Department). See sections I.D.2., 
3., 4., and 8. of this Summary of Comments and Explanation of 
Revisions. The disputes involved in Exception 3, Exception 4, and 
Exception 7 are not Federal tax controversies, and Appeals lacks 
settlement authority after a referral of a case to the Justice 
Department, as described in Exception 14. The inclusion of Exception 3, 
Exception 4, Exception 7, and Exception 14 in the list of proposed 
exceptions in proposed Sec.  301.7803-2(c) was to clarify these points. 
These exceptions to Appeals consideration all existed before the TFA. 
Expanding the role of Appeals as suggested is not administratively 
feasible and is outside the scope of these regulations and section 
7803. Furthermore, lack of consideration by Appeals does not leave the 
taxpayer without an administrative option to resolve a controversy as 
issues can always be resolved during an examination. Accordingly, these 
final regulations do not adopt this comment.
B. Definition of a Federal Tax Controversy: Proposed Sec.  301.7803-
2(b)(2)
    Section 7803(e)(3) provides that the function of Appeals is ``to 
resolve Federal tax controversies without litigation,'' without 
defining the term ``Federal tax controversy.'' Proposed Sec.  301.7803-
2(b)(1), consistent with the statutory text of section 7803(e)(4), 
provides that the Appeals resolution process is generally available to 
all taxpayers to resolve Federal tax controversies. Proposed Sec.  
301.7803-2(b)(2) defined a Federal tax controversy as a dispute over an 
administrative determination with respect to a particular taxpayer made 
by the IRS in administering or enforcing the internal revenue laws, 
related Federal tax statutes, and tax conventions to which the United 
States is a party (collectively referred to as internal revenue laws) 
that arises out of the examination, collection, or execution of other 
activities concerning the amount or legality of the taxpayer's income, 
employment, excise, or estate and gift tax liability; a penalty; or an 
addition to tax under the internal revenue laws.
    As proposed in the proposed regulations and consistent with the 
statute, the definition of a Federal tax controversy is broad. Although 
the proposed definition does not specifically refer to tax-exempt 
organizations, it includes an IRS determination that an organization is 
not tax-exempt because the determination concerns whether the 
organization has or will have a tax liability in some amount. 
Similarly, determinations of private foundation or qualified employee 
plan status and tax-exempt or other tax-advantaged bond status are 
included in the proposed regulations' definition of a Federal tax 
controversy because these determinations concern whether there is or 
will be a tax liability for the foundation; plan, or its participants; 
or bond issuers or holders. In these final regulations, the Treasury 
Department and the IRS have modified the definition of a Federal tax 
controversy to clarify that such determinations are included in the 
definition.
    Consistent with section 7803(e), the definition of Federal tax 
controversy means that determinations that Appeals historically may not 
have considered may now be considered by Appeals. These determinations 
include the classification or reclassification of a non-exempt 
charitable trust under

[[Page 3649]]

section 4947(a)(1) of the Code as described in section 509(a)(3) of the 
Code; the classification or reclassification of the organization as an 
exempt operating foundation under section 4940(d)(2) of the Code; 
relief from retroactive revocation or modification of a determination 
letter under section 7805(b) of the Code; denials of relief requested 
under Sec.  301.9100-3 to permit the organization to be recognized and 
treated as tax-exempt effective as of a date earlier than the date of 
application; and pursuant to section 7611 of the Code relating to 
restrictions on church tax inquiries and examinations, revocation of 
the exempt or church status of an organization that is listed as, or 
claims to be, a church.
C. Disputes Not Meeting the Definition of a Federal Tax Controversy 
That Are Treated as Federal Tax Controversies: Proposed Sec.  301.7803-
2(b)(3)
    Proposed Sec.  301.7803-2(b)(3) provided that notwithstanding the 
definition of a Federal tax controversy, disputes over administrative 
determinations made by the IRS with respect to a particular person 
regarding certain topics listed in proposed Sec.  301.7803-2(b)(3) are 
treated as Federal tax controversies.
1. Additional Disputes Treated as Federal Tax Controversies: Proposed 
Sec.  301.7803-2(b)(3)(iv) Through (vi)
    As explained previously in section I.B. of this Summary of Comments 
and Explanation of Revisions, the final regulations clarify that the 
definition of Federal tax controversy includes determinations 
concerning the status of tax-exempt organizations, private foundations, 
and qualified plans, and the status of tax-exempt or other tax-
advantaged bonds. Accordingly, the final regulations delete these items 
from proposed Sec.  301.7803-2(b)(3)(iv) through (vi), because 
inclusion would be unnecessary and duplicative. The final regulations 
retain the language in proposed Sec.  301.7803-2(b)(3)(vi) referring to 
arbitrage claims, because such claims do not involve a tax and 
therefore do not meet the definition of a Federal tax controversy, as 
defined in Sec.  301.7803-2(b)(2). That language is now included in the 
final regulations and redesignated as Sec.  301.7803-2(b)(3)(iv).
2. FOIA Cases Treated as Federal Tax Controversies: Proposed Sec.  
301.7803-2(b)(3)(ii)
    One comment was received on proposed Sec.  301.7803-2(b)(3)(ii) 
relating to a request under the Freedom of Information Act (5 U.S.C. 
552) (FOIA). This comment recommended removing proposed Sec.  301.7803-
2(b)(3)(ii) because FOIA does not affect the collection of taxes or the 
liability for taxes of the FOIA requester. The Treasury Department and 
the IRS do not adopt this recommendation. Appeals consideration of IRS 
administrative determinations listed in proposed Sec.  301.7803-
2(b)(3), including in proposed Sec.  301.7803-2(b)(3)(ii), is 
consistent with the historical practice and functions of Appeals as 
codified in section 7803(e)(3). See Sec.  301.7803-2(b)(3)(i) through 
(vi). As a matter of tax policy and administration, it is important 
that FOIA requesters have, consistent with past practice, the 
opportunity for consideration by Appeals. The TFA does not prohibit 
Appeals from reviewing determinations by the IRS that are not Federal 
tax controversies, and retaining the ability for review by Appeals is 
beneficial to the public.
D. Exceptions to Appeals Consideration: Exception 1 Through Exception 
24
    The Treasury Department and the IRS received several comments 
concerning the exceptions to Appeals consideration listed in proposed 
Sec.  301.7803-2(c)(1) through (24). The exceptions that were subject 
to the greatest number of comments were Exception 19 and Exception 20.
1. Frivolous Position and Penalties Related to Frivolous Positions and 
False Information: Exception 1 and Exception 2
    Two comments were received on Exception 1 and Exception 2. 
Exception 1 provides that Appeals consideration is not available for an 
administrative determination made by the IRS with respect to a 
particular taxpayer in which the IRS rejects a frivolous position. 
Similarly, Exception 2 provides that Appeals consideration is not 
available regarding a penalty assessed by the IRS with respect to a 
particular taxpayer for asserting a frivolous position, for making a 
frivolous submission, or for providing false information.
    One comment agreed with excepting from Appeals consideration 
penalties and determinations under section 6702 or section 6682 of the 
Code. A second comment alleged the exceptions would curtail the 
independence of Appeals by eliminating its right to review 
determinations of frivolousness because such determinations are not 
infallible. That comment recommended Appeals should have the option, 
but not the obligation, to decide whether positions have been wrongly 
labeled frivolous to strike a balance between its independence and the 
IRS's need to weed out frivolous arguments.
    The Treasury Department and the IRS do not adopt this 
recommendation to give Appeals the option to consider whether the IRS 
has mistakenly labeled a taxpayer's position as frivolous or wrongly 
imposed a frivolous filing penalty. Referring every frivolous argument 
to Appeals upon the request of a taxpayer, for Appeals to then 
determine whether or not to grant consideration, would be unnecessarily 
resource intensive and inconsistent with the historic, reasonable 
limitations on access to Appeals. Section I.C.1. of the proposed 
regulations' Explanation of Provisions identified similar existing 
restrictions precluding the consideration of frivolous positions by 
Appeals that can be found in Sec.  601.106(b) of the Statement of 
Procedural Rules (26 CFR part 601) (regarding appeal procedures not 
extending to cases involving solely the failure or refusal to comply 
with tax laws because of frivolous moral, religious, political, 
constitutional, conscientious, or similar grounds), IRM 5.14.3.3(1) 
(10-20-2020) (relating to installment agreement requests made to delay 
collection action), and IRM 8.22.5.5.3 (11-08-2013) (relating to 
frivolous issues). There are sound policy reasons for these historic 
limitations. As explained in sections I.C.1. and 2. of the proposed 
regulations' Explanation of Provisions, Appeals consideration of 
frivolous positions would facilitate abuse of the tax system by 
allocating IRS and Appeals resources to reviewing positions that have 
already been designated as frivolous. Penalties imposed under section 
6702 or section 6682 are designed to deter frivolous behavior or 
improper conduct by a taxpayer. If Appeals does not consider the merits 
of a taxpayer's frivolous position, it follows that Appeals should not 
consider the IRS's assessment of a penalty with respect to the taxpayer 
as well. The exceptions are consistent with the restriction in section 
7803(e)(5)(D) that the notice and protest procedures under section 
7803(e)(5) do not apply to a request if the issue is frivolous within 
the meaning of section 6702(c). Also, as explained in section I.A. of 
this Summary of Comments and Explanation of Revisions, excluding a 
matter from Appeals consideration has no bearing on its independence.
2. Whistleblower Awards: Exception 3
    Two comments were received on Exception 3, which provides that 
Appeals consideration is not available for any administrative 
determination made by the IRS under section 7623 of

[[Page 3650]]

the Code relating to awards to whistleblowers.
    The first comment suggested creating an interagency administrative 
review process, and it is discussed in section I.A. of this Summary of 
Comments and Explanation of Revisions.
    The second comment asserted that the authority relied upon for 
Exception 3 is the proposed definition of Federal tax controversy in 
the proposed regulations and alleged that the language of the TFA 
authorizes Appeals to review whistleblower matters. The Treasury 
Department and the IRS do not adopt this comment. The exception for 
whistleblower awards under section 7623 in Exception 3 is a historic 
exception that has existed before the enactment of the TFA. For 
example, section 7623 was one of the exclusions listed in section 4 of 
Rev. Proc. 2016-22, 2016-15 IRB 577 (April 11, 2016), which provides 
procedures for Chief Counsel referrals of cases docketed in the Tax 
Court to Appeals for settlement. Its inclusion in the list of proposed 
exceptions was to clarify the point that section 7803(e) does not cover 
whistleblower awards because they do not involve a Federal tax 
controversy. In a whistleblower case, the IRS determination involves 
whether the whistleblower is entitled to an award. The whistleblower's 
tax liability is not at issue, and Appeals is not reviewing a 
determination by the IRS in its examination, collection, or execution 
of other activities with respect to the whistleblower's tax liability. 
This award determination is separate and distinct from a determination 
of tax liability.
3. Administrative Determinations Made by Other Agencies: Exception 4
    One comment concerned Exception 4, which provides that Appeals 
consideration is not available for an administrative determination 
issued by an agency other than the IRS. An example is a determination 
by the Alcohol and Tobacco Tax and Trade Bureau (TTB) concerning an 
excise tax administered by and within its jurisdiction. The comment 
suggested creating an interagency administrative review process, and it 
is discussed in section I.A. of this Summary of Comments and 
Explanation of Revisions.
4. Denials of Access Under the Privacy Act: Exception 7
    One comment was received on Exception 7, which provides that 
Appeals consideration is not available for any dispute regarding a 
determination of the IRS resulting in denial of access under the 
Privacy Act (5 U.S.C. 552a(d)(1)) (relating to access to records) to a 
particular person. The comment suggested creating an interagency 
administrative review process, and it is discussed in section I.A. of 
this Summary of Comments and Explanation of Revisions.
5. IRS Erroneously Returns or Rejects an Offer in Compromise: Exception 
9
    Exception 9 provides that Appeals consideration is not available 
regarding the application of section 7122(f) of the Code when the IRS 
erroneously returns or rejects a taxpayer's offer in compromise (OIC) 
submitted under section 7122 as nonprocessable. As explained in section 
I.C.9. of the proposed regulations' Explanation of Provisions, 
Exception 9 includes, for example, the claim that the IRS's mistaken 
rejection or return was in bad faith. Because the IRS returned or 
rejected the offer without making a determination regarding the OIC, 
there is no administrative determination made by the IRS for Appeals to 
review.
    Two comments were received concerning OICs. The first comment 
recommended that Appeals should be authorized to review when the IRS 
erroneously returns or rejects a taxpayer's OIC as nonprocessable or no 
longer processable. The comment stated that such a return or rejection 
is an administratively reviewable determination, that not allowing 
Appeals review is a significant loss of rights for the taxpayer 
including low-income taxpayers in particular, that excepting this issue 
from Appeals review circumvents section 7122(f), and that Appeals 
review would promote consistency.
    The Treasury Department and the IRS do not adopt this comment. 
Appeals has not historically reviewed such returned or rejected OICs. 
Exception 9 is narrow, and it is consistent with the pre-existing OIC 
regulations. Section 301.7122-1(f)(5)(ii) states, in part, that if an 
OIC is returned following a ``determination'' that the offer was 
nonprocessable, that return of the OIC ``does not constitute a 
rejection of the offer for purposes of this provision and does not 
entitle the taxpayer to appeal the matter to appeals under the 
provisions of this paragraph (f)(5) . . .'' Also, the comment's 
recommendation is not consistent with the function of Appeals, which is 
to weigh litigation hazards in applying the law to specific facts. 
Reviewing the completeness of an OIC is not a weighing of hazards. 
There would be no hazards of litigation for Appeals to consider or 
merits to weigh--either the OIC request is complete or not complete. 
Further, the recommendation, if adopted, would conflict with the OIC 
regulations. The return of an OIC as nonprocessable is an example of a 
premature review in Sec.  301.7803-2(d)(1) because the originating IRS 
office has not completed its action. It has been a longstanding 
practice of the IRS to return incomplete or otherwise nonprocessable 
OICs that taxpayers fail to perfect. See for example, sec. 5 of Rev. 
Proc. 2003-71, 2003-36 I.R.B. 517 (September 8, 2003) (relating to 
offers in compromise).
    The second comment opined that Exception 9 is too loosely defined 
and its focus should be limited to those taxpayers who are abusing the 
process such as by creating undue delay. This comment is not adopted. 
Exception 9 is narrowly limited to a case in which the IRS erroneously 
returns or rejects an OIC as nonprocessable or no longer processable 
and the taxpayer requests Appeals consideration to assert that the OIC 
should be deemed to be accepted under section 7122(f). This exception 
is narrowly defined to sufficiently meet the administrative goals of 
the rule.
6. Criminal Prosecution Is Pending Against Taxpayer: Exception 10
    One comment was submitted on Exception 10, which provides that 
Appeals consideration is not available for a Federal tax controversy 
with respect to a taxpayer while a criminal prosecution or a 
recommendation for criminal prosecution is pending against the taxpayer 
for a tax-related offense other than with the concurrence of Chief 
Counsel and the Justice Department, as applicable.
    The comment recommended that the final regulations should limit 
Exception 10 to only cases in which the pending criminal matter 
pertains to the same subtitle of the Code and that Exception 10 not be 
applied to matters within a single subtitle that are completely 
unrelated to each other and do not involve common facts or tax 
transactions. The Treasury Department and the IRS do not adopt this 
comment. Exception 10 allows for Appeals consideration with the 
concurrence of Chief Counsel and the Justice Department, as applicable. 
Such concurrence is fact-based and case specific and would accommodate 
the situations addressed in the comment because if they were to arise, 
Chief Counsel and/or the Justice Department could determine whether 
concurrence would be appropriate under the facts and circumstances of 
the particular case. Limiting the exception as suggested in the comment 
could require that Appeals consideration be afforded, when such 
consideration could interfere

[[Page 3651]]

with a pending criminal matter. It would also be contrary to 
regulations under 26 CFR part 601, which provide general procedural 
rules for Appeals functions and limit Appeals' authority to act in a 
case in which criminal prosecution is recommended, except with the 
concurrence of Chief Counsel. See Sec.  601.106(a)(2)(vi).
7. IRS's Automated Process of Certifying a Seriously Delinquent Tax 
Debt: Exception 12
    One comment was received on Exception 12, which provides that 
consideration by Appeals is not available for the certification or 
issuance of a notice of certification of a seriously delinquent Federal 
tax debt of a particular taxpayer to the Department of State (State 
Department) under section 7345 of the Code (relating to the revocation 
or denial of a taxpayer's passport in the case of serious tax 
delinquencies). According to the comment, if Appeals consideration is 
not available for certification or issuance of a notice of 
certification of a seriously delinquent tax debt, the taxpayer lacks an 
important check on the automated system and does not have an 
opportunity to contest whether the statutory requirements for passport 
certification have been met under section 7345(b).
    The Treasury Department and the IRS do not adopt this comment. In 
the event of a mistake in the automated process, a taxpayer has the 
opportunity to contact the IRS personnel identified in the notice, 
which provides a check on the automated process. Specifically, the 
taxpayer receives Notice CP508C, Notice of certification of your 
seriously delinquent Federal tax debt to the State Department, 
informing the taxpayer to contact the IRS at the phone number in that 
notice to request reversal of the certification if the taxpayer 
contends the certification is erroneous. The role of Appeals is to 
review administrative determinations and to weigh the hazards of 
litigation, not to provide a backstop to an automated process. This 
exception existed before the TFA. See Notice 2018-1, 2018-3 I.R.B. 299 
(January 16, 2018).
    The comment also alleged Exception 12 violates the Taxpayer Bill of 
Rights (TBOR). See https://www.irs.gov/taxpayer-bill-of-rights. The 
Treasury Department and the IRS do not adopt this comment; this 
exception is consistent with the TBOR. The TBOR does not grant new 
enforceable rights but instead it obligates the IRS to ensure that its 
employees are familiar with and act in accord with rights established 
in other Code provisions. See Facebook, Inc. v. Internal Revenue 
Service, 2018 WL 2215743, at *13-14 (N.D. Cal. 2018). See also Hancock 
County Land Acquisitions LLC, et. al. v. United States, 553 F. Supp. 3d 
1284, 1296 n. 11 (N.D. Ga. 2021). As discussed in section I.A. of this 
Summary of Comments and Explanation of Revisions, section 7803(e)(4) 
does not confer an absolute right to Appeals consideration.
8. Authority Over the Matter Rests With Another Office: Exception 14
    One comment was received on Exception 14. Exception 14 provides 
that consideration by Appeals is not available for any case, 
determination, matter, decision, request, or issue with respect to a 
particular taxpayer that Appeals lacks the authority to settle. 
Proposed Sec.  301.7803-2(c)(14)(i) through (v) provides a non-
exclusive list of examples illustrating this rule, including the 
example in proposed Sec.  301.7803-2(c)(14)(i) that Appeals does not 
have authority to resolve an issue with respect to a particular 
taxpayer in a docketed case after a referral has been made to the 
Justice Department. The comment suggested creating an interagency 
administrative review process, which is discussed in section I.A. of 
this Summary of Comments and Explanation of Revisions. The settlement 
authority for any litigation under the jurisdiction of the Justice 
Department already vests with the Justice Department.
9. Certain Technical Advice Memoranda and Technical Advice From an 
Associate Office in a Docketed Case: Exception 15 and Exception 16
    One comment was submitted concerning Exception 15 and Exception 16. 
Exception 15 provides that Appeals consideration is not available for 
certain adverse actions related to the initial or continuing 
recognition of tax-exempt status, an entity's classification as a 
foundation, the initial or continuing determination of employee plan 
qualification, or a determination involving an obligation and the 
issuer of an obligation under section 103 of the Code, when the adverse 
action is based upon a technical advice memorandum (TAM) issued by an 
Associate Office of Chief Counsel (Associate Office) before an appeal 
is requested. Similarly, Exception 16 provides that Appeals 
consideration is not available for any case docketed in the Tax Court 
if the notice of deficiency, notice of liability, or final adverse 
determination letter is based upon a TAM issued by an Associate Office 
in that case involving an adverse action described in Exception 15.
    The comment asserted that granting an exception for an appeal in 
cases of tax-exempt status in which a TAM has been issued would 
unnecessarily narrow an already small area of appeal rights, and 
suggested that it would be beneficial to all parties to bring the 
matter to Congress' attention if this is more a matter in need of 
statutory clarification.
    The Treasury Department and the IRS do not adopt this comment, 
which suggested a change but did not provide a rationale for a change, 
refute the rationale given in the proposed regulations, or explain its 
conclusion that the two proposed exceptions would unnecessarily narrow 
Appeals review. As reflected in the proposed regulations' Explanation 
of Provisions in sections I.C.15. and 16., these two exceptions are 
supported by reasonable rationales and are narrowly tailored to achieve 
their purposes. If the legal issues and determinations in Exception 15 
and Exception 16 are the subject of a TAM from an Associate Office, 
they are excepted from Appeals consideration because traditionally 
Chief Counsel has exclusive authority over the dispute administratively 
or upon litigation. A TAM is advice furnished by an Associate Office in 
a memorandum that responds to any request for assistance on any 
technical or procedural legal question involving the interpretation and 
proper application of any legal authority that is submitted in 
accordance with an applicable revenue procedure. Chief Counsel's 
decision with respect to the issues related to the initial or 
continuing recognition of tax-exempt status, an entity's classification 
as a foundation, the initial or continuing determination of employee 
plan qualification, or a determination involving an obligation and the 
issuer of an obligation under section 103 is the legal position of the 
IRS with respect to the particular facts and circumstances that are the 
subject of the TAM. These exceptions are important to preserving Chief 
Counsel's authority to resolve these sensitive legal issues. As noted 
in section I.C.15. of the proposed regulations' Explanation of 
Provisions, these exceptions are consistent with historical practice as 
found in Sec.  601.106(a)(1)(v)(a) and IRM 8.1.1.2.1(1)(c.) (02-10-
2012) (currently found in IRM 8.1.1.3.1 (01-09-2024)). Furthermore, a 
broad range of tax-exempt status issues are reviewable by Appeals under 
these final regulations.
10. Letter Rulings Issued by Associate Office: Exception 17
    Two comments were received on Exception 17, which excepts from

[[Page 3652]]

Appeals consideration a decision by an Associate Office regarding 
whether to issue a letter ruling or the content of a letter ruling. 
However, the subject of the letter ruling may be considered by Appeals 
if all other requirements in Sec.  301.7803-2 are met. For example, if 
the taxpayer subsequently files a return taking a position that is 
contrary to the letter ruling and that position is examined by the IRS, 
Appeals could consider that Federal tax controversy if all other 
requirements in Sec.  301.7803-2 are met.
    The first comment stated that the provision in Exception 17 
helpfully makes clear that the subject of the letter ruling may be 
considered by Appeals if all other requirements in proposed Sec.  
301.7803-2 are met, and recommended that this provision should be 
strengthened to offer an affirmative safe harbor for appeals for 
taxpayers who in good faith attempt to fulfill the terms of Sec.  
301.7803-2. The Treasury Department and the IRS do not adopt this 
recommendation. The criteria for a ``safe harbor'' would not be 
practical because meeting some but not all of the requirements would 
not be sufficient. A taxpayer must comply with all the requirements in 
Sec.  301.7803-2 in order to have Appeals consider the taxpayer's 
Federal tax controversy. The second comment on Exception 17 relates to 
9100 relief and CAMs and is discussed in section I.H. of this Summary 
of Comments and Explanation of Revisions.
11. Challenges Alleging That a Statute Is Unconstitutional: Exception 
18
    Exception 18 provides that Appeals consideration is not available 
for any issue based on a taxpayer's argument that a statute violates 
the United States Constitution unless there is an unreviewable decision 
from a Federal court holding that the cited statute is 
unconstitutional. Exception 18 does not preclude Appeals from 
considering a Federal tax controversy based on arguments other than the 
constitutionality of a statute, such as whether the statute applies to 
the taxpayer's facts and circumstances.
    Proposed Sec.  301.7803-2(c)(18) defined the phrase unreviewable 
decision as a decision of a Federal court that can no longer be 
appealed to any Federal court because all appeals in a case have been 
exhausted or the time to appeal has expired and no appeal was filed, 
and no further action can be taken in the case by any Federal court 
once there is an unreviewable decision. An unreviewable decision means 
an unreviewable decision of any Federal court, regardless of where the 
taxpayer resides. The proposed language ``and no further action can be 
taken in the case by any Federal court once there is an unreviewable 
decision'' has been deleted in the final regulations because it is 
inaccurate in certain circumstances. For example, even if a district 
court grants a motion to dismiss and the decision is appealed and a 
reversal of that motion becomes unreviewable, the case would have 
further action such as discovery, dispositive motions, or trial. See 
Sec.  301.7803-2(c)(18).
    The Treasury Department and the IRS received several comments on 
Exception 18. One comment agreed with Exception 18 to not allow Appeals 
to consider constitutional challenges to Federal tax statutes unless 
there is an unreviewable court decision. It recommended the final 
regulations should strengthen the concept of an ``unreviewable 
decision.'' See section I.D.11.a. of this Summary of Comments and 
Explanation of Revisions regarding the phrase unreviewable decision.
    Two comments objected to Exception 18 as inconsistent with the TFA 
and recommended Appeals should be allowed to consider constitutional 
challenges to Federal tax statutes in the absence of an unreviewable 
decision. One objected that denial of Appeals consideration in 
Exception 18 strips taxpayers of a statutory right to Appeals. The 
other objected that Exception 18 improperly restricts access to Appeals 
and forces taxpayers to sacrifice legal arguments.
    The Treasury Department and the IRS do not adopt these two 
comments; Exception 18 is consistent with the TFA. As discussed 
previously, the TFA does not provide an absolute statutory right to an 
administrative appeal. Rather, the Treasury Department and the IRS have 
the statutory authority to provide exceptions to Appeals consideration. 
Exception 18 is one such exception, and it is narrowly tailored and 
supported with reasonable rationales. As proposed, Exception 18 does 
not exclude the constitutionality issue from Appeals consideration 
totally but merely provides that Appeals will not be the first forum to 
hear such a challenge because it is not the appropriate forum without a 
final decision from a Federal court. The Treasury Department and the 
IRS still agree with the rationales in section I.C.18. of the proposed 
regulations' Explanation of Provisions, namely that questions within 
the IRS regarding the constitutionality of a statute, and positions 
taken by the IRS in light of such questions, are determinations of 
general applicability resolved at the highest levels of the Treasury 
Department and the IRS, in consultation with the Office of Legal 
Counsel of the Justice Department, and subject to the ultimate 
resolution by a court of relevant jurisdiction. Moreover, a 
constitutional determination should be communicated and applied 
consistently to all taxpayers. It would be inappropriate for Appeals to 
consider the constitutionality of a statute for a particular taxpayer 
in the absence of an unreviewable court decision, which is accessible 
to all taxpayers and the IRS.
    A comment asserted Appeals has historically analyzed legal 
arguments concerning tax statutes, regulations, and IRS procedures and 
so Appeals is capable of considering these arguments. This comment 
insinuated that Exception 18, Exception 19, and Exception 20 are 
premised on Appeals' training, skills, or competency to review legal 
arguments related to statutes, regulations, or IRS procedures. The 
rationales for Exception 18, Exception 19, and Exception 20 provided in 
sections I.C.18., 19., and 20. of the proposed regulations' Explanation 
of Provisions do not relate to Appeals' training, skills, or 
competency. Appeals will continue to review taxpayer arguments about 
whether the relevant statutes, regulations, or IRS procedures apply to 
the taxpayer's factual circumstances just as Appeals has historically 
done.
    A comment construed the definition of an unreviewable decision to 
mean an unreviewable decision only from a Federal court within the 
circuit in which the taxpayer resides. Neither the proposed 
regulations, nor these final regulations, require the unreviewable 
decision to be in the taxpayer's own circuit. Another comment 
recommended eliminating Exception 19 and Exception 20 but, in the 
alternative, it recommended clarifying the phrase unreviewable 
decision. The comment interpreted the phrase as the proposed 
regulations intended, that is, as an unreviewable decision of any 
Federal court, regardless of where the taxpayer resides, but stated it 
was unclear and should be clarified. In response to these comments, the 
language in the proposed regulations, ``a decision of a Federal 
court,'' is clarified in the final regulations to ``a decision of any 
Federal court regardless of where the taxpayer resides.'' See Sec.  
301.7803-2(c)(18).
    A comment recommended the final regulations modify the definition 
of unreviewable decision to provide the decision must be one that would 
govern the taxpayer's case. In other words, the final regulations 
should ensure, according to the comment, that Appeals access is 
available only if there is a

[[Page 3653]]

relevant decision that would bind the taxpayer and the Government if 
the dispute proceeded to litigation. The Treasury Department and the 
IRS do not adopt this comment because it is too limiting. If the only 
unreviewable decision that Appeals should consider is one that is 
binding on the IRS and the taxpayer, then it would not be a matter of 
Appeals weighing the hazards of litigation because that decision would 
be controlling on the taxpayer. Also, such a rule would prevent Appeals 
from weighing the hazards of litigation by evaluating how a court in 
another circuit ruled on the issue. Like the proposed regulations would 
have done, the final regulations allow Appeals to consider that final 
decision in considering the hazards of litigation.
    A comment stated that the Treasury Department and the IRS have no 
basis to hold Appeals to a different, and higher standard than that of 
the Justice Department or the Solicitor General. The comment's 
reference to the Justice Department and Solicitor General appeared to 
be a reference to those offices resolving cases in a manner that 
Appeals could not under Exception 19 and Exception 20. The comment 
appeared to suggest that Appeals should be able to do the same in 
fulfilling its function of considering hazards of litigation.
    The Treasury Department and the IRS do not adopt this comment 
because the authority of employees of the Justice Department and the 
Solicitor General to take certain actions in fulfilling their distinct 
functions and roles does not mean employees of Appeals, like Appeals 
Officers (AO), can take the same actions. As explained in section 
I.D.12. of this Summary of Comments and Explanation of Revisions, 
questions regarding the validity of a regulation, or the procedural 
validity of a notice or revenue procedure, involve determinations of 
general applicability resolved at the highest levels of the Treasury 
Department and the IRS and must be followed by all IRS employees, 
including AOs. Such validity decisions should be communicated and 
applied consistently to all taxpayers. It would be inappropriate for 
Appeals to act in contravention with those decisions in a specific case 
involving one taxpayer and consider validity issues in the absence of 
an unreviewable court decision.
    Three comments recommended Appeals be allowed to consider the 
hazards of litigation on a validity issue for a notice or regulation 
based on a similar or analogous court decision on a different notice or 
regulation. The comments mentioned Green Valley Investors v. 
Commissioner, 159 T.C. 5 (2022) (Tax Court setting aside Notice 2017-
10, 2017-4 IRB 544 for failure to comply with the Administrative 
Procedure Act's (APA's) notice and comment requirements) as an example 
and suggested that if a court decision invalidated a notice for the 
same APA reason that a taxpayer is raising to challenge the validity of 
other guidance, Appeals should consider the hazards of litigation in 
the taxpayer's analogous case.
    The Treasury Department and the IRS do not adopt these comments 
because it would defeat the purposes of Exception 18, Exception 19, and 
Exception 20. Appeals consideration is limited to unreviewable 
decisions involving the validity of the particular regulation, notice, 
or revenue procedure being challenged. As described previously, in this 
Summary of Comments and Explanation of Revisions and sections I.C.18., 
19., and 20. of the proposed regulations' Explanation of Provisions, 
the promulgation of a regulation, notice, or revenue procedure consists 
of multiple levels of review at the highest levels within the Treasury 
Department and the IRS, and taxpayers are not well-served by 
confidential decisions by Appeals on a validity matter that is 
applicable to only a single taxpayer. Appeals does not have the 
authority to unilaterally contradict the decisions made through the 
regulatory or subregulatory process. In addition, there may be other 
defenses to APA challenges that the IRS might assert, and therefore the 
Tax Court having ruled on an unrelated notice or regulation is not a 
reason to provide the carve-out suggested here.
    A comment recommended eliminating the unreviewable decision 
requirement and allowing Appeals to consider a judicial decision in 
weighing the hazards of a case. Similarly, another comment recommended 
allowing Appeals to consider hazards pending the appeal of a decision. 
The Treasury Department and the IRS do not adopt these recommendations 
because they would defeat the purpose of the unreviewable decision rule 
in Exception 18, Exception 19, and Exception 20. Until the pending 
decision becomes unreviewable by a Federal court, as described in 
proposed Sec.  301.7803-2(c)(18), it would not be sufficiently final. 
The finality of the judicial decision is important because the judicial 
branch is charged with independently interpreting Federal statutes and 
a Federal court's decision on the merits may reject the determinations 
made by the Treasury Department or the IRS. There must be a final 
decision, however, before Appeals can weigh the hazards of litigation 
with respect to these specific challenges because a lower court 
decision that is not final might be overturned on appeal and the 
challenges under Exception 18, Exception 19, and Exception 20 relate to 
determinations of general applicability resolved at the highest levels 
of the Treasury Department and the IRS. Until a judicial decision is 
unreviewable and final, Appeals must respect the decision of the 
Secretary and the Commissioner of Internal Revenue (Commissioner). In 
that regard, the final regulations clarify that the definition of 
unreviewable decision includes decision of any Federal court regardless 
of where the taxpayer resides.
12. Challenges Alleging That a Treasury Regulation Is Invalid and 
Challenges Alleging That a Notice or Revenue Procedure Is Invalid: 
Exception 19 and Exception 20
    Exception 19 provides that Appeals consideration is not available 
for any issue based on a taxpayer's argument that a Treasury regulation 
is invalid unless there is an unreviewable decision from a Federal 
court invalidating the regulation as a whole or the provision in the 
regulation that the taxpayer is challenging. Exception 20 provides that 
Appeals consideration is not available for any issue based on a 
taxpayer's argument that a notice or revenue procedure published in the 
Internal Revenue Bulletin is procedurally invalid unless there is an 
unreviewable decision from a Federal court holding it to be invalid. As 
proposed, Exception 19 and Exception 20 do not preclude Appeals from 
considering a Federal tax controversy based on arguments other than the 
validity of a regulation, or procedural validity of a notice or revenue 
procedure, such as whether the regulation, notice, or revenue procedure 
applies to the taxpayer's facts and circumstances.
    The Treasury Department and the IRS received several comments on 
Exception 19 and Exception 20. In response to these comments, the 
Treasury Department and the IRS have modified the language in proposed 
Sec.  301.7803-2(c)(19) and (20), as explained below.
    A comment agreed with the rationales described in the proposed 
regulations for Exception 19 and Exception 20 that Appeals should not 
consider these types of challenges. Another comment made the same 
objection it made to Exception 18 that denial of Appeals consideration 
in Exception 19 and Exception 20 strips taxpayers of a statutory right 
to Appeals. Another comment made the same objection it made to 
Exception 18 that

[[Page 3654]]

Exception 19 and Exception 20 improperly restrict access to Appeals and 
forces taxpayers to sacrifice legal arguments.
    Like Exception 18, Exception 19 and Exception 20 are consistent 
with the TFA, which does not provide an absolute statutory right to an 
administrative appeal, and permits the Treasury Department and the IRS 
to provide exceptions. The rationales for Exception 19 and Exception 20 
are similar to the rationales for Exception 18, as discussed 
previously. See sections I.C.18., 19., and 20. of the proposed 
regulations' Explanation of Provisions. Questions regarding the 
validity of a regulation, or the procedural validity of a notice or 
revenue procedure, involve determinations of general applicability 
resolved at the highest levels of the Treasury Department and the IRS 
and must be followed by IRS employees, including AOs. Such validity 
decisions also should be communicated and applied consistently to all 
taxpayers. It therefore would be inappropriate for Appeals to act in 
contravention with those institutional decisions in a specific case 
involving one taxpayer and consider the validity issues in the absence 
of an unreviewable court decision.
    A comment stated Exception 19 and Exception 20 are not narrowly 
tailored because they encompass any challenge to almost any level of 
published guidance. The Treasury Department and the IRS do not adopt 
this comment. Exception 19 and Exception 20 are narrowly tailored and 
expressly allow Appeals to consider arguments other than the validity 
of a regulation, or procedural validity of a notice or revenue 
procedure, such as whether the regulation, notice, or revenue procedure 
applies to the taxpayer's facts and circumstances. They do not exclude 
the validity challenges from Appeals consideration totally but merely 
provide Appeals will not be the first forum to hear these challenges 
because it is not the appropriate forum for such challenges without an 
unreviewable decision of a court. Further, Exception 20 is even 
narrower in scope, applying only to a taxpayer's argument that a notice 
or revenue procedure published in the Internal Revenue Bulletin is 
procedurally invalid.
    A comment asserted that Exception 19 and Exception 20 did not exist 
prior to the TFA and taxpayers historically could at least raise 
validity challenges to published IRS guidance and have those challenges 
be considered by Appeals; therefore Exception 19 and Exception 20 
appear contrary to the TFA's intent to expand taxpayer access to 
Appeals. As explained previously, Exception 19 and Exception 20 are 
consistent with the intent of the TFA to grant the Treasury Department 
and the IRS the authority to make exceptions, which includes the 
authority to provide new exceptions that did not exist before the 
enactment of the TFA.
    A comment asserted that Exception 19 and Exception 20 are contrary 
to Appeals' mission or function because they will force the parties 
into litigation instead of providing an opportunity for Appeals to 
resolve the case. Another comment similarly stated that Exception 20 
tries to cast the validity determination as a high-level policy 
decision, while Appeals' function is to hear and settle cases and in 
doing so it is not making policy.
    The Treasury Department and the IRS do not adopt these comments. 
Unlike most Appeals analyses that weigh litigation hazards in applying 
the law to specific facts, Appeals' potential consideration of the 
validity of a regulation or the procedural validity of a notice or 
revenue procedure does not necessarily involve taxpayer-specific facts. 
As explained in section I.C.20. of the proposed regulations' 
Explanation of Provisions, the issue of whether an IRS notice or 
revenue procedure is procedurally valid involves a determination 
regarding whether specific IRS subregulatory guidance complied with 
administrative law requirements, such as notice and comment under 5 
U.S.C. 553. Whether a notice or revenue procedure was properly issued 
involves facts solely related to the Treasury Department and the IRS 
and is unlike the application of the tax law to a taxpayer's specific 
facts. Furthermore, the procedurally validity of a notice or revenue 
procedure is a determination of general applicability resolved at the 
highest levels of the Treasury Department and the IRS and such a 
determination would not be appropriate for Appeals to consider in a 
specific case involving one taxpayer.
    The latter comment regarding Exception 20 did not address the other 
rationale in support of Exception 20, namely, that the issue of whether 
a notice or revenue procedure failed to comply with administrative law 
requirements should be communicated and applied consistently. As 
explained in the proposed regulations, an unreviewable decision of a 
Federal court is the appropriate means of accomplishing this objective 
because a settlement before Appeals is specific to a taxpayer and 
cannot be made available to other taxpayers. An unreviewable decision 
makes information accessible to all taxpayers and the IRS regarding 
whether a notice or revenue procedure was prescribed in accordance with 
applicable Federal law. A determination by the judicial branch on the 
merits of the validity challenge may reject the determinations made by 
the Treasury Department or the IRS with regard to the validity of a 
regulation or the procedural validity of a notice or revenue procedure, 
thereby providing a basis for Appeals to consider those issues. If no 
unreviewable decision has been issued on the validity challenge, 
Appeals would not be weighing hazards with respect to that particular 
guidance of general applicability because it has not been successfully 
challenged in court yet. Instead, absent an unreviewable decision, 
Appeals would be contravening the decision made at the highest levels 
of the Treasury Department and the IRS.
    Four comments related to Appeals' competency to consider validity 
challenges to a regulation, notice, or revenue procedure. A comment 
alleged Appeals has historically analyzed legal arguments concerning 
statutes, tax regulations, and IRS procedures. A similar comment 
asserted that under Exception 19 and Exception 20 Appeals is unable to 
assess the hazards of litigation in a way that a Chief Counsel trial 
attorney is not restricted and that specialists within Appeals are 
competent to consider these arguments when evaluating other hazards of 
litigation in the case. A comment stated that AOs have the training and 
qualifications to consider all hazards of litigation, including 
challenges to the validity of regulations, notices, or revenue 
procedures, or if they lack such training and qualifications, the IRS 
should provide them instead of preventing Appeals from considering 
these issues. Another comment asserted Appeals is familiar with 
considering all arguments made by a taxpayer regarding the 
applicability of regulations, notices, and revenue procedures, and it 
should be able to consider in docketed cases credible arguments about 
hazards involving validity challenges to a regulation, notice, or 
revenue procedure because the APA and ordinary judicial methods for 
review of legislative rules apply to tax cases.
    The Treasury Department and the IRS do not adopt these comments. 
None of these exceptions relate to Appeals' training, skills, or 
competency. Appeals' competency does not pertain to the rationales of 
Exception 19 and Exception 20 to prevent a decision for one taxpayer 
regarding guidance of general applicability, which has been approved at 
the highest levels within

[[Page 3655]]

the Treasury Department and the IRS. Also, like Appeals employees, 
Chief Counsel attorneys handling docketed cases in Tax Court must 
follow regulations, notices, and revenue procedures. See Chief Counsel 
Directives Manual (CCDM) or IRM 32.1.1.2.5(1) (08-02-2018) (relating to 
Treasury decisions); CCDM/IRM 32.2.2.10 (08-11-2004) (relating to force 
and effect of specified publications). Further, Appeals applying the 
APA and ordinary judicial methods to invalidate guidance would lack 
consistency because Appeals' action, unlike an unreviewable decision, 
is not public and is applicable to only that taxpayer challenging the 
guidance. A final court decision is applicable to, and accessible by, 
all taxpayers and the IRS, which promotes consistency. Furthermore, a 
final, unreviewable court decision ensures that Appeals does not act in 
contravention of a decision made at the highest levels of the Treasury 
Department and the IRS. In the absence of an unreviewable decision, 
Appeals would not have a court decision with respect to a particular 
document to weigh or evaluate any hazards.
    Two comments recommended that if the Justice Department has 
conceded that an unrelated notice was invalid on the same basis as in 
the holding by the United States Court of Appeals for the Sixth Circuit 
(Sixth Circuit) in Mann Construction Inc. v. United States, 27 F.4th 
1138 (6th Cir. 2022) (holding a different notice invalid because it was 
required to follow APA notice and comment procedures and failed to do 
so), Appeals should consider the hazards of litigation on a notice 
validity issue in a taxpayer's case involving a different notice. 
Similarly, another comment recommended allowing Appeals to consider the 
hazards of litigation on a regulation validity issue in a taxpayer's 
case if the Justice Department has settled or conceded that an 
unrelated regulation was invalid.
    The Treasury Department and the IRS do not adopt these comments for 
the same reasons they disagree with the similar comments regarding 
analogous court decisions. See section I.D.11.a. of this Summary of 
Comments and Explanation of Revisions. If adopted, these 
recommendations would defeat the purposes of Exception 19 and Exception 
20. Moreover, there are numerous factors that go into determining 
whether a case should be settled, and a recommendation for a settlement 
in one case may not dictate the same result in another case. There may 
be other defenses to APA challenges that the IRS might assert and 
therefore the Justice Department having settled an issue based on 
hazards of litigation involving an unrelated notice or regulation is 
not a reason to provide the suggested carve-out. Regarding the 
transaction in the case cited by the comment, for cases within the 
Sixth Circuit, the Treasury Department and the IRS have represented in 
court that APA matters conceded by the Government in the Mann case 
would not be subject to examination by the IRS in other listed 
transaction cases and therefore such cases would not come up for 
Appeals review.
    A comment agreed with the policy expressed in Exception 19, but 
with a caveat that ``invalidity'' should be further defined. 
Specifically, the comment asked whether a change in the law would make 
regulations invalid or would fit within the provision in proposed Sec.  
301.7803-2(c)(19) that states Exception 19 would not prevent a taxpayer 
from arguing that a regulation does not apply to their position. 
Generally, a regulation would still be valid for prior tax years before 
any repeal of or amendment to the statute upon which the regulation is 
based, and a change in the statute would have precedent over the 
regulation for tax years after the change. These regulations do not 
prohibit a taxpayer from arguing whether the statute applies to the 
taxpayer's own facts and circumstances. In that case, Appeals is 
considering the applicability of the statute to the taxpayer for the 
relevant period. In response to this comment, the Treasury Department 
and the IRS have revised the language in Exception 19 and Exception 20 
by adding a reference to the statute to clarify that Appeals may 
consider arguments based on whether a statute applies to the taxpayer's 
facts and circumstances. See Sec.  301.7803-2(c)(19) and (20). Also, 
for the sake of clarity, Exception 19 is revised to define the term 
invalid. See Sec.  301.7803-2(c)(19).
    The same comment asked that if regulations overlap in a factual 
situation whether reconciliation of such a situation would involve a 
determination that a regulation is invalid. As proposed, Exception 19 
would still allow Appeals to consider whether the regulations apply to 
a taxpayer's facts and circumstances, but to the extent the taxpayer 
argues that the regulations are invalid, Exception 19 would preclude 
Appeals from considering that validity issue in the absence of an 
unreviewable decision. The concern raised in this comment appeared to 
relate to ensuring consistency. Appeals is not the only administrative 
function within the IRS; there are other offices and other ways within 
the IRS to ensure such consistency short of consideration by Appeals or 
litigating the issue.
    A comment on Exception 20 expressed some confusion as to the 
meaning of the term procedurally invalid and stated the comment had 
little concern regarding Exception 20 if its intent is only that 
Appeals would not be allowed to consider whether a notice or revenue 
procedure was properly adopted or promulgated. As explained in section 
I.C.20. of the proposed regulations' Explanation of Provisions, the 
term procedurally invalid in proposed Sec.  301.7803-2(c)(20) was 
intended to mean challenges to procedural determinations regarding 
notices and revenue procedures, including determinations regarding 
compliance with administrative law requirements. This comment 
recommended defining the term procedurally invalid for the sake of 
clarity. The Treasury Department and the IRS adopt this recommendation 
and have defined the term to mean ``any determination regarding whether 
a notice or revenue procedure failed to comply with administrative law 
requirements, such as notice and comment under 5 U.S.C. 553.'' See 
Sec.  301.7803-2(c)(20).
    The same comment noted that the rationale behind Exception 19 is 
generally sound but opined that that rationale does not support 
Exception 20 because a notice or revenue procedure does not undergo the 
public notice and comment process under the APA, lacks the same 
approval process, and does not carry the same weight or level of 
authority of a regulation. The Treasury Department and the IRS do not 
adopt this comment. The same rationale for Exception 19 applies to 
Exception 20 because whether a notice or revenue procedure is 
procedurally valid is a determination of general applicability resolved 
at the highest levels of the Treasury Department and the IRS. As 
discussed previously, such a determination would not be appropriate for 
Appeals to consider in a specific case involving one taxpayer.
    A comment asserted that Appeals has historically heard arguments 
about the application of Treasury regulations and that the meaning of a 
regulation, notice, or revenue procedure is not exclusively determined 
by senior officials at the Treasury Department and the IRS. This 
comment appears to misperceive the scope of Exception 19 and Exception 
20. These exceptions do not preclude Appeals from considering a Federal 
tax controversy based on arguments other than the validity of a 
Treasury regulation or procedural validity of a notice or revenue 
procedure. As stated

[[Page 3656]]

in the text of Exception 19 and Exception 20, such arguments include 
whether the Treasury regulation, notice, or revenue procedure applies 
to the taxpayer's facts and circumstances. Appeals may resolve the 
Federal tax controversy by weighing the likelihood a court would agree 
with the position of the taxpayer or the Government. As for the 
comment's suggestion that guidance is not exclusively determined by 
senior officials at the Treasury Department and the IRS, the final 
regulations do not adopt this comment. While employees of all levels of 
the Treasury Department and the IRS have a role in promulgating a 
regulation, notice, or revenue procedure, such guidance is reviewed and 
approved by senior officials in the Treasury Department and the IRS, 
including the Assistant Secretary of the Treasury (Tax Policy) and the 
Deputy Commissioner of the IRS as appropriate. See generally IRM 32.1.1 
(November 13, 2019).
    Two comments related to consistency by Appeals. A comment alleged 
the proposed regulations did not explain why consistency cannot be 
accomplished if Appeals reviews the validity issues. The same comment 
argued Exception 19 and Exception 20 will result in bad policy because 
they will make the Appeals process more inconsistent, random, and less 
responsive to legal developments, causing additional costs and delay 
for taxpayers who otherwise could access Appeals while invalidity 
arguments work through the court system. Another comment stated that 
Appeals can reach a coordinated position on validity challenges and 
forcing taxpayers to litigate will decrease uniformity of tax 
administration because the IRS can settle or concede issues to avoid 
adverse opinions and because years may pass before there is an 
unreviewable judicial decision deciding the validity challenge.
    Sections I.C.18., 19., and 20. of the proposed regulations' 
Explanation of Provisions, provides the Treasury Department and the 
IRS' position on consistency. Any determinations with respect to 
constitutional challenges to a statute, the validity of a regulation, 
or procedural validity of a revenue procedure or notice should be 
communicated and applied consistently to all taxpayers. An unreviewable 
decision of a Federal court is the appropriate means of making 
information accessible to taxpayers, and the Treasury Department and 
the IRS do not agree that Exception 19 and Exception 20 will result in 
bad policy. A court's unreviewable decision on the validity of a 
regulation, or procedural validity of a revenue procedure or notice 
ensures the judicial branch decides questions of law. The Treasury 
Department and the IRS recognize the deliberateness of the judicial 
process, but absent that process, Appeals lacks the authority to take 
actions contrary to the reasoned decisions of the Secretary and the 
Commissioner. An unreviewable decision is publicly available, and 
generally applicable, to all taxpayers and the IRS, which promotes 
consistency and uniformity. Having Appeals weigh hazards of litigation 
based on an unreviewable decision that is publicly available and 
generally applicable to all taxpayers is sounder policy than a 
confidential decision by Appeals on a matter that is applicable to only 
a single taxpayer. The question of whether Appeals can reach a 
coordinated position on validity challenges is irrelevant because under 
these exceptions the issues would not be considered by Appeals in the 
first place in the absence of an unreviewable decision.
    A comment opined that Appeals should have the right to determine 
all hazards of litigation, including challenges to all levels of IRS 
published guidance on an unlimited basis and including rationale from 
all court opinions because this approach is consistent with the 
Treasury Department's 2019 Policy Statement on the Tax Regulatory 
Process (Policy Statement). Policy Statement on the Tax Regulatory 
Process (March 5, 2019), https://home.treasury.gov/policy-issues/tax-policy/tax-regulatory-process. The Treasury Department and the IRS do 
not adopt this comment. An unreviewable decision is necessary because 
it is publicly available to the IRS and taxpayers and generally 
applicable, which promotes consistency and uniformity. The Policy 
Statement is unrelated to Exception 19 and Exception 20 because it 
concerns the tax regulatory process and does not address Appeals or its 
function. The Policy Statement also explicitly states it does not 
create any right or benefit, either substantive or procedural.
    A comment alleged that Exception 19 and Exception 20 undercut the 
key focus area for Appeals in fiscal year 2023 to improve taxpayer 
experience. To the contrary, Exception 19 and Exception 20 are 
consistent with the TFA as it relates to taxpayer experience. Section 
1101 of the TFA requires the IRS to develop a comprehensive strategy 
for customer service and submit the plan to Congress. The strategy will 
include best practices of customer service provided in the private 
sector, including, online services, telephone call back, and training 
of employees, and the strategy must incorporate best practices of 
businesses to meet reasonable customer expectations. The strategic 
plan, updated guidance, and training materials must also be available 
to the public. The taxpayer experience requirement does not address 
whether a taxpayer can have the taxpayer's case or issue considered by 
Appeals. The strategic plan addresses topics like communications with 
the IRS and taxpayer information services, such as expanded digital 
services, guides to taxpayer resources and IRS communication channels, 
and outreach and education. See Publication 5426, Taxpayer First Act 
Report to Congress (January 2021).
    A comment alleged that Appeals' consideration of all of a 
taxpayer's arguments, including validity challenges, does not harm the 
Government but instead provides the taxpayer and the Government the 
opportunity to resolve the issue without litigation. Appeals' 
consideration of validity challenges would harm the Government because 
in the absence of an unreviewable decision, such consideration would 
undermine the decisions based on the regulatory and subregulatory 
guidance process as described in sections I.C.19. and I.C.20. of the 
proposed regulations' Explanation of Provisions, and result in a 
decision by Appeals for one taxpayer on an issue that is not related to 
the taxpayer's specific facts and that would not be publicly available 
to other taxpayers and the IRS.
    Another comment recommended that Appeals should consider APA 
challenges as part of its weighing of hazards of litigation. The 
comment argued that Treasury regulations are not necessarily in 
compliance with the APA because they go through an extensive review 
process involving numerous offices within the Treasury Department and 
the IRS. The comment alleged that challenges to a regulation's validity 
is taxpayer specific because any controversy before Appeals will 
involve the IRS enforcing an agency rule against a taxpayer based on 
that taxpayer's facts. Finally, the comment also suggested that the 
exceptions would prove unworkable because final, unreviewable decisions 
may be limited to one district court or circuit.
    The Treasury Department and the IRS do not adopt this comment. As 
explained previously in this section and section I.D.12. of this 
Summary of Comments and Explanation of Revisions, the promulgation of a 
regulation, or publication of a notice or revenue procedure goes 
through multiple levels of review within the

[[Page 3657]]

Treasury Department and the IRS. An individual AO does not have the 
authority to unilaterally contradict the decisions made through the 
regulatory or subregulatory process. Furthermore, as explained above 
and in section I.C.20. of the proposed regulations' Explanation of 
Provisions, the validity of a regulation or the procedural validity of 
a notice of revenue procedure does not involve taxpayer-specific facts. 
The validity of a regulation or the procedurally validity of a notice 
or revenue procedure is a determination of general applicability and 
does not involve the application of tax law to a specific set of facts 
and circumstances. Lastly, as explained in section I.D.11. of this 
Summary of Comments and Explanation of Revisions, the Treasury 
Department and the IRS have clarified the final regulations to specify 
that an unreviewable decision means ``a decision of any Federal court 
regardless of where the taxpayer resides.'' See Sec.  301.7803-
2(c)(18).
13. Cases or Issues Designated for Litigation or Withheld From Appeals: 
Exception 21
    Four comments were received on Exception 21, which provides that 
Appeals consideration is not available for any case or issue designated 
for litigation, or withheld from Appeals consideration in a Tax Court 
case, in accordance with guidance regarding designating or withholding 
a case or issue. As proposed, designation for litigation means that the 
Federal tax controversy, comprising an issue or issues in a case, will 
not be resolved without a full concession by the taxpayer or by 
decision of the court.
    A comment proposed that Chief Counsel attorneys should have the 
flexibility to refer all docketed cases to Appeals for resolution. This 
comment is not adopted. To the extent this comment invites a Chief 
Counsel attorney to disregard the Office of Chief Counsel's decision to 
designate or withhold a case, trial attorneys do not operate 
independently of managerial direction. In addition, such flexibility 
would defeat the exception's purpose. As explained in section I.C.21. 
of the proposed regulations' Explanation of Provisions, cases are 
designated for litigation or withheld in the interest of sound tax 
administration to establish judicial precedent, promote consistency, 
conserve resources, or reduce litigation costs for the taxpayers and 
the IRS. Moreover, section 3.01 of Rev. Proc. 2016-22 provides that 
docketed cases are not referred to Appeals if Appeals issued the notice 
of deficiency or made the determination that is the basis of the Tax 
Court's jurisdiction. This exclusion also is set forth in Exception 22, 
see Sec.  301.7803-2(c)(22), and prevents duplicative review by 
Appeals.
    Two comments stated that Exception 21 provides too much deference 
to Chief Counsel and recommended that the exception delete the 
reference to withheld cases. The Treasury Department and the IRS do not 
adopt these comments. The withholding of cases or issues from Appeals 
has been, and will continue to be, limited and rare.\1\ The 
determination to withhold a case or issue from Appeals requires a high-
level review, with the decision ultimately resting with the Division 
Counsel or a higher-level Chief Counsel official. See section 3.03 of 
Rev. Proc. 2016-22. When Congress enacted the TFA, it was aware of the 
historic exceptions to Appeals consideration, including Chief Counsel's 
authority to designate a case for litigation or withhold a case from 
Appeals consideration on the basis of a referral not being in the 
interest of sound tax administration under Rev. Proc. 2016-22. Congress 
recognized that the Treasury Department and the IRS retain their 
historical discretion to determine whether the resolution of particular 
types of disputes is appropriate for Appeals, and the discretion of the 
IRS to determine whether a particular Federal tax controversy is 
appropriate for the Appeals resolution process. As proposed, Exception 
21 is narrowly tailored, and it does not encroach on Appeals' 
independence for the reasons discussed previously in section I.A. of 
this Summary of Comments and Explanation of Revisions.
---------------------------------------------------------------------------

    \1\ Since the TFA was enacted on July 1, 2019, the IRS has 
denied three requests for referral to Appeals, as described in 
section 7803(e)(5)(A), on the basis of sound tax administration. 
Because section 7803(e)(5)(A) is limited to denials of a request for 
referral to Appeals by those taxpayers in receipt of a notice of 
deficiency authorized under section 6212, fewer than 130 cases not 
subject to section 7803(e)(5)(A) were otherwise withheld from 
Appeals review during that period by Division Counsel under section 
3.03 of Rev. Proc. 2016-22. For example, these cases include cases 
involving partnerships in which a final partnership administrative 
adjustment was issued instead of a notice of deficiency.
---------------------------------------------------------------------------

    Two comments that objected to Exception 19 and Exception 20, in the 
alternative, recommended the regulations provide notice and protest 
rules for any taxpayer with a case or issue withheld or designated for 
litigation. One of the comments recommended at least requiring meetings 
with Chief Counsel executives to explain the decision. Similarly, 
another comment recommended that low-income taxpayers should receive a 
written explanation and given an opportunity to object.
    The Treasury Department and the IRS do not adopt these comments. If 
Chief Counsel determines that a docketed case or issue will be withheld 
from Appeals, Chief Counsel will notify the taxpayer that the case will 
not be referred to Appeals. See section 3.03 of Rev. Proc. 2016-22. 
Taxpayer cases that are withheld from Appeals consideration under 
Exception 21 and meet the requirements of proposed Sec.  301.7803-3 
already would receive a written notice detailing the facts of the case, 
the reason for the denial, and the opportunity to protest the denial 
pursuant to section 7803(e)(5). As discussed in section 2 of this 
Summary of Comments and Explanation of Revisions, section 7803(e)(5) 
only requires notice and denial protest rights be given to a taxpayer 
in receipt of a notice of deficiency. Consistent with the statute, 
these final regulations do not extend notice and denial protest rights 
to taxpayers who did not receive a notice of deficiency. With respect 
to situations involving low-income taxpayers, as described by the 
comment, such taxpayers would similarly receive an explanation and 
opportunity to protest under proposed Sec.  301.7803-3 after they 
receive a notice of deficiency.
    Another comment alleged that the designation of cases or issues for 
litigation is not rare and prevents sound tax administration in 
thousands of cases because Appeals could arrive at the correct amount 
of tax or a deduction and the IRS's approach of settling a designated 
case only if taxpayers concede all issues, including all penalties, has 
created a backlog in the IRS and the court. The comment is factually 
incorrect because designation of a case or issue is rare. The IRS has 
designated fewer than 10 cases since 2013.
    A comment recommended the IRS make public a list of all designated 
cases docketed in Tax Court and all designated issues and publish the 
total number of taxpayers affected by cases or issues being designated 
for litigation. The Treasury Department and the IRS do not adopt this 
comment. The comment raises potential disclosure concerns under section 
6103 of the Code relating to the prohibition of the disclosure of 
return information. Even if such disclosure was not prohibited by law, 
it is beyond the scope of these regulations.

[[Page 3658]]

14. Appeals Consideration Is a Prerequisite to Jurisdiction of the Tax 
Court: Exception 23
    One comment was received on Exception 23. Exception 23 provides 
that Appeals consideration is not available for a case in which timely 
consideration by Appeals must be requested before a petition is filed 
in the Tax Court because exhaustion of administrative review, including 
Appeals consideration, is a prerequisite for the Tax Court's 
jurisdiction, and the taxpayer failed to timely request Appeals 
consideration.
    The comment opined the heading for this exception in the proposed 
regulations' preamble (that is, Appeals Consideration is a Prerequisite 
to the Jurisdiction of Tax Court) did not mention whether there could 
be exceptions to the requirement to exhaust administrative remedies. 
The comment recommended adding language to the regulation's text to 
explicitly indicate that Exception 23 does not apply when there is an 
exception to the requirement to exhaust administrative remedies as 
provided in a statute or other guidance. The Treasury Department and 
the IRS do not adopt this recommendation. The text of the regulation 
adequately covers the comment's point, as the text makes clear that 
this exception applies only when timely Appeals consideration itself is 
a prerequisite to the Tax Court's jurisdiction.
E. Procedural and Timing Requirements Are Followed: Proposed Sec.  
301.7803-2(e)
    One comment was received on proposed Sec.  301.7803-2(e), which 
provides the procedural and timing requirements that a taxpayer must 
meet before Appeals may consider the taxpayer's Federal tax 
controversy. Specifically, proposed Sec.  301.7803-2(e) provides that a 
request for Appeals consideration must be submitted in the time and 
manner prescribed in applicable forms, instructions, or other 
administrative guidance and that all procedural requirements must be 
complied with for Appeals to consider a Federal tax controversy.
    The comment recommended that the final regulations explicitly 
direct the IRS to list specific requirements that the IRS must meet for 
accessibility, to explain the processes in a way that is easy to 
understand for the unrepresented taxpayer and feasible for all 
taxpayers, including low-income taxpayers who may face financial and 
other barriers to following traditional mailing processes. The comment 
suggested including notices with appeal rights delivered by mail and to 
a taxpayer's online IRS account if they have one; deadlines to file an 
appeal should be clearly and accurately stated in plain language on the 
first page of a notice that has an appeal right; the IRS should have an 
easy-to-understand fill-in form that contains all required elements to 
request an appeal, and the form should be available for every level of 
appeal; each notice from the IRS that carries an appeal right should 
enclose a copy of the simple form along with an envelope and 
instructions for certified mailing to prove the mailing date; and each 
notice from the IRS that carries an appeal right should also include 
both a simple URL link and QR code link to the online simplified form, 
the form should be easily fillable on a computer or a smartphone and be 
available in multiple languages, and the taxpayer should be able to 
submit this form online to meet the deadline for the Appeals request.
    The Treasury Department and the IRS do not adopt this comment's 
recommendations because they are outside the scope of these final 
regulations. The comment is better suited to be addressed in the 
specific correspondence sent from the IRS to taxpayers. Promoting 
taxpayer communication, understanding, and efficiency, including in 
accessing Appeals, are important topics that the IRS will continue to 
look at as it improves and develops its systems and procedures. In that 
regard, the IRS will carefully consider the suggestions in this comment 
as part of that process.
F. One Opportunity for Consideration by Appeals: Proposed Sec.  
301.7803-2(f)
    One comment was received with a suggestion relating to the general 
rule of one opportunity for Appeals consideration in proposed Sec.  
301.7803-2(f)(1). Another comment was received on the exceptions to 
that general rule. Those comments are addressed in this section I.F. of 
the Summary of Comments and Explanation of Revisions.
1. In General. Proposed Sec.  301.7803-2(f)(1)
    Proposed Sec.  301.7803-2(f)(1) provides that if a Federal tax 
controversy is eligible for consideration by Appeals and the procedural 
and timing requirements are followed, a taxpayer generally has one 
opportunity for Appeals to consider such matter or issue in the same 
case for the same period or in any type of future case for the same 
period. The comment on proposed Sec.  301.7803-2(f)(1) recommended that 
the final regulations should explicitly include the situation in which 
the taxpayer and the Government have run out of time for Appeals 
consideration prior to the expiration of the statute of limitations and 
a notice of deficiency being issued, thereby confirming that a 
taxpayer's case can be heard by Appeals either before or after a case 
is docketed (although not both).
    The Treasury Department and the IRS agree that if there is 
insufficient time remaining on the limitations period for Appeals 
consideration, a taxpayer in receipt of a notice of deficiency would 
have the opportunity to have Appeals consider the taxpayer's case after 
the taxpayer has filed a petition with the Tax Court and the case is 
docketed, assuming the issue being considered by Appeals is not subject 
to an exception described in the final regulations. An example has been 
added to Sec.  301.7803-2(e) to illustrate this point, which is a more 
appropriate place in the regulations for this addition.
2. Exceptions. Proposed Sec.  301.7803-2(f)(1) and (2)
    There are several exceptions to the general rule in proposed Sec.  
301.7803-2(f)(1). Proposed Sec.  301.7803-2(f)(1) provides an exception 
to the proposed general rule in a case in which the Tax Court remands a 
collection due process (CDP) case for reconsideration. Proposed Sec.  
301.7803-2(f)(2) provides an exception for a taxpayer that participated 
in an Appeals early consideration program but did not reach an 
agreement with Appeals. Proposed Sec.  301.7803-2(f)(2) also provides 
an exception to the general rule in proposed Sec.  301.7803-2(f)(1) for 
taxpayers who provide new information to the IRS and who meet the 
conditions and requirements for audit reconsideration or for 
reconsideration of liability issues previously considered by Appeals. 
Appeals may consider the new information.
    A comment recommended clarifying in proposed Sec.  301.7803-2(f)(2) 
that a new development in the law is ``new information'' that would 
allow Appeals reconsideration of the same matter. The Treasury 
Department and the IRS recognize that the original phrasing in the 
paragraph was unclear. For purposes of these final regulations, new 
information is intended to mean additional facts that the taxpayer did 
not provide during the original examination. It is not intended to mean 
a new development in the law. Additional language has been added to 
Sec.  301.7803-2(f)(2) in the final regulations to clarify the intended 
meaning.

[[Page 3659]]

G. Special Rules. Proposed Sec.  301.7803-2(g)
    A comment suggested that Chief Counsel delaying Appeals review of a 
case was tantamount to a denial of Appeals review. The Treasury 
Department and the IRS disagree. As explained in section I.H.2. of the 
proposed regulations' Explanation of Provisions regarding the special 
rule in proposed Sec.  301.7803-2(g), Chief Counsel may delay 
forwarding a docketed case to Appeals when Chief Counsel anticipates 
filing a dispositive motion such as a motion for summary or partial 
summary judgment, or a motion to dismiss for lack of jurisdiction, in 
which case Chief Counsel will retain jurisdiction over the case until 
the Tax Court rules on the motion. This flexibility to respond to the 
needs of specific Federal tax controversies promotes the efficient 
disposition of a taxpayer's case, including developing or narrowing the 
issues in dispute. The taxpayer will continue to be eligible for 
consideration by Appeals if the litigation continues and all other 
requirements in Sec.  301.7803-2 are met. Accordingly, these final 
regulations do not adopt this comment.
H. Section 9100 Relief and Change of Accounting Method
    The list of exclusions in proposed Sec.  301.7803-2(c) does not 
include certain exclusions from Appeals consideration currently 
provided in the IRM relating to requests for 9100 relief and CAMs. In 
the proposed regulations, the Treasury Department and the IRS requested 
comments on whether these items should be included in the list of 
exclusions. Specifically, comments were requested on whether the binary 
nature of decisions by an Associate Office regarding 9100 relief or CAM 
requests makes these decisions unsuitable for Appeals review; whether a 
different review standard should apply if Appeals considers the 
decisions; and what impact would Appeals review of the decisions have 
on later years that are not before Appeals.
    In response, the Treasury Department and the IRS received four 
comments. One comment in support of adopting an Appeals exception 
recommended that Exception 17 relating to letter rulings issued by an 
Associate Office be finalized as proposed so that the regulations 
ensure, consistent with the historical IRS position, that Appeals not 
be permitted to consider an Associate Office decision concerning 
whether to issue 9100 relief or CAM letter rulings. See section I.D.10. 
of this Summary of Comments and Explanation of Revisions regarding 
Exception 17. According to this comment, letter ruling decisions 
regarding 9100 relief and CAMs should not be considered by Appeals for 
the reasons described in the proposed regulations that apply to other 
types of letter rulings. In particular, a letter ruling interprets 
internal revenue laws and applies them to the taxpayer's specific set 
of facts. A voluntary request for a letter ruling is not an 
administrative determination that is a part of the IRS's compliance 
function. A taxpayer receiving a letter ruling is not obligated to file 
a return consistent with that letter ruling. Generally, the program is 
designed instead to provide taxpayers with information regarding 
whether the IRS will accept a position to be taken on the taxpayer's 
return. For letter rulings responding to a taxpayer's request for a 
CAM, the letter ruling grants or denies consent under section 446(e) of 
the Code. The Treasury Department and the IRS adopt this recommendation 
for those reasons and added language to clarify this point that 
Exception 17 includes Associate Office decisions on 9100 relief 
requests and CAM requests. See Sec.  301.7803-2(c)(17). While Appeals 
cannot consider an Associate Office's decision on whether to issue a 
letter ruling or the content of a letter ruling, Exception 17 
recognizes that Appeals may consider the subject of the letter ruling 
if all other requirements in Sec.  301.7803-2 are met. For example, if 
an Associate Office issues an adverse letter ruling to a taxpayer, the 
taxpayer cannot immediately appeal the issuance of the adverse letter 
ruling. If the taxpayer later files a return taking a position that is 
contrary to the letter ruling and that position is examined by the IRS, 
Appeals can consider that Federal tax controversy if all other 
requirements in Sec.  301.7803-2 are met.
    The comment also recommended a separate exclusion for Appeals 
consideration of decisions by an Associate Office regarding 9100 relief 
or CAM requests. The Treasury Department and the IRS do not adopt this 
recommendation. As previously described, if a taxpayer files a tax 
return contrary to the Associate Office's decision and a Federal tax 
controversy arises that involves the subject of the adverse decision, 
Appeals could consider the subject of that Associate Office's decision 
in the dispute if all other requirements in Sec.  301.7803-2 are met.
    Another comment suggested the final regulations should empower 
Appeals to consider an Associate Office's decisions regarding 9100 
relief or CAM requests because Appeals consideration would protect 
taxpayer rights. Two comments suggested the final regulations should 
allow Appeals to consider such cases because judicial review is costly 
and time consuming and Appeals consideration would reduce litigation. 
The Treasury Department and the IRS agree Appeals review as described 
in the preceding paragraph is consistent with the function of Appeals 
to resolve Federal tax controversies without litigation and is 
consistent with the provision that such resolution be generally 
available to all taxpayers. A comment suggested the final regulations 
should empower Appeals to consider such cases because Appeals 
consideration would promote impartial resolution. The Treasury 
Department and the IRS disagree with this reasoning because, as 
explained previously in this Summary of Comments and Explanation of 
Revisions, impartiality presupposes that the matter is being considered 
by Appeals in the first place. Once a Federal tax controversy is 
referred to Appeals, Appeals will consider the hazards of litigation 
while impartially considering the positions of the taxpayer and of the 
IRS.
    A comment asserted accounting method issues do not have to be 
viewed as binary and noted Appeals already reviews adjustments 
initiated by the IRS through an examination. According to this comment, 
Appeals should review accounting method issues consistently regardless 
of whether the originating function was through an IRS examination or 
an Associate Office. Similarly, another comment asserted that Appeals 
consideration of a CAM letter ruling denial that was issued on the 
basis that the requested change would not clearly reflect income or 
would otherwise not be in the interest of sound tax administration 
would allow Appeals review of the substantive positions in these cases, 
similar to Appeals review of the substantive issue in cases arising in 
examination or a docketed case, and that foreclosing Appeals 
consideration would create inconsistencies and be counterproductive to 
tax administration. The Treasury Department and the IRS agree that 
Appeals should have the ability to review accounting method issues 
arising in an examination, even when the accounting method issue 
relates to an Associate Office's denial of a CAM letter ruling request.
    Another comment suggested Appeals consideration of an Associate 
Office's decisions regarding 9100 relief or CAM requests would promote 
consistent application of laws and public confidence in the IRS. 
Appeals consideration of an Associate Office's

[[Page 3660]]

decisions regarding 9100 relief or CAM requests would promote public 
confidence in the IRS and is consistent with the purpose of the TFA.
    A comment asserted the ultimate decision may be binary, in that an 
Associate Office either does or does not permit 9100 relief or a CAM. 
According to this comment, the binary nature of decisions on these 
matters should not automatically exclude them from Appeals review. To 
the extent an Associate Office's decision regarding a 9100 relief or 
CAM request is viewed as a binary decision, the Treasury Department and 
the IRS agree with the comment's general premise that the binary nature 
of such decisions would not automatically exclude them from Appeals 
review. If a taxpayer files a tax return contrary to the Associate 
Office's decision and a Federal tax controversy arises that involves 
the subject of the adverse decision, Appeals may consider the subject 
of that Associate Office's decision in the dispute if all other 
requirements in Sec.  301.7803-2 are met.
    The IRM currently provides that Appeals will not partially or fully 
concede an issue in a case in which an Associate Office's decision 
would be reviewed by a court using an abuse of discretion standard. One 
comment urged that if Appeals is permitted to consider a decision by an 
Associate Office that denied a 9100 relief or a CAM request, then the 
final regulations should apply a different standard of review than the 
abuse of discretion standard used for other administrative 
determinations. The comment recommended that Appeals should only be 
permitted to make concessions if it determines there is a significant 
risk that, if litigated, a court would find that the IRS abused its 
discretion in issuing an adverse letter ruling. Another comment 
observed that a CAM request may be denied by an Associate Office for 
many different reasons, including, for example, on the basis of 
substantive issues or due to procedural issues when the Associate 
Office determines that the taxpayer has not complied with all the 
procedural terms and conditions, such as filing requirements and 
deadlines. The comment urged the Treasury Department and the IRS to 
look through the superficial similarities of these denials to the 
underlying legal issues when determining whether Appeals review is 
warranted. The Treasury Department and the IRS agree that an Associate 
Office may issue a denial letter on a 9100 relief request or CAM 
request for a variety of different reasons, which are generally 
expressed in the applicable statute, regulations, or other guidance 
published in the Internal Revenue Bulletin. A decision to deny such a 
request, whether on a procedural or a substantive basis, is based on 
all the facts and circumstances. The final regulations do not provide a 
standard of review because it is outside the scope of these 
regulations, and the Treasury Department and the IRS expect the 
existing review standard would be used by Appeals for such cases.
    A comment stated Appeals may need to enter into closing agreements 
with taxpayers to ensure that future taxable years are consistent with 
the request that was denied by the Associate Office, but that closing 
agreements would be more difficult for the taxpayer and the Government 
to reverse in future years compared to a letter ruling issued by an 
Associate Office. These regulations do not alter the authority 
delegated to the Associate Offices over 9100 relief or CAM requests or 
to restrict Appeals' ability to use its existing settlement authority 
to review or settle such cases. See, e.g., Rev. Proc. 2002-18, 2002-1 
C.B. 678 (regarding procedures relating to the settling of method 
change issues). Likewise, these regulations do not alter the IRS's 
authority to review these issues during an examination of a taxpayer's 
Federal income tax return.

I. Miscellaneous Recommendations Regarding Proposed Sec.  301.7803-2

    A comment expressed concern that the proposed regulations could 
make the Appeals review process more confusing and stressful for 
taxpayers, including low-income taxpayers, but did not specify how or 
why this could happen. The Treasury Department and the IRS disagree 
with this comment. The procedural requirements, timing requirements, 
and almost all of the exceptions to consideration by Appeals already 
exist in previously established guidance regarding Appeals. As in the 
past, the proposed exceptions are limited in number and the vast 
majority of taxpayers, including low-income taxpayers, would have the 
opportunity to have Appeals consider their Federal tax controversies.
    The same comment suggested considering the impact of the 
regulations on closed cases in Appeals. To the extent this comment is 
suggesting these regulations should cover procedures for reopening a 
closed case, that topic is beyond the scope of these regulations. 
Procedures for reopening closed Appeals cases already exist in other 
guidance. See IRM 8.6.1.7 (09-25-2019).
    A comment suggested that the proposed regulations overlap with 
Sec.  601.106. To the extent that the Treasury Department and the IRS 
are not repealing or revising Sec.  601.106, the comment recommended 
Treasury explicitly harmonize areas of overlap and consolidate all 
Appeals regulations into adjacent sections of the regulations to 
prevent ambiguity and controversy. In the alternative, even if no 
actual or perceived conflict exists, the comment recommended adding 
cross-references in Sec.  301.7803-2 to avoid creating a trap for the 
unwary.
    The Treasury Department and the IRS do not agree with this comment 
and do not adopt these recommendations. The Statement of Procedural 
Rules, 26 CFR part 601, are procedural rules governing internal IRS 
affairs. Those rules do not concern the substantive resolution of 
Federal tax controversies by Appeals.
    Two comments recommended additional funding, including funding for 
Appeals in order to more effectively and fairly serve taxpayers, and 
limit the need for the exceptions in these regulations. The 
recommendation addresses operational matters of Appeals and is beyond 
the scope of these regulations because it does not address the proposed 
regulations or recommend any changes.
    One comment addressed the Interim Guidance (IG) Memorandum (Control 
Number AP-08-0922-0011) that Appeals issued on September 14, 2022, 
relating to validity challenges to regulations and relating to 
procedural validity challenges to notices or revenue procedures. This 
comment alleged that the IRS has already begun to make the substance of 
Exception 19 and Exception 20 effective even though, as proposed in the 
proposed regulations, they would not take effect until 30 days after 
the publication of a final regulation. The comment recommended that 
Appeals pause using these exceptions before the regulations are 
finalized.
    The Treasury Department and the IRS decline to adopt the comment's 
recommendation because it is outside the scope of these regulations. 
The IG Memorandum provides interim guidance by Appeals to AOs and does 
not have bearing on these final regulations.

II. Notice and Protest of Denial Procedures Following Issuance of a 
Notice of Deficiency: Proposed Sec.  301.7803-3

    Two comments were received on proposed Sec.  301.7803-3, which 
implements the notice and protest procedures of section 7803(e)(5). As 
proposed, these procedures apply if any taxpayer requests Appeals 
consideration of a matter or issue, the request is denied, and the 
taxpayer meets the

[[Page 3661]]

requirements of proposed Sec.  301.7803-3(a)(1) through (5). Proposed 
Sec.  301.7803-3(a)(1) adopts the statutory language in section 
7803(e)(5)(A), which refers to any taxpayer in receipt of a notice of 
deficiency authorized under section 6212 (relating to notice of 
deficiency).
    The comments recommended that the notice and protest procedures 
should not be limited to taxpayers in receipt of a notice of 
deficiency. The Treasury Department and the IRS do not adopt this 
recommendation because it is contrary to the TFA. Section 7803(e)(5) 
does not grant the right to notice and protest a denial to all 
taxpayers. That statute requires the provision of such rights when the 
taxpayer is in receipt of a notice of deficiency, the taxpayer requests 
referral to Appeals, and that request is denied. Thus, a taxpayer would 
not be entitled to notice and protest procedures under section 
7803(e)(5) and proposed Sec.  301.7803-3 in the absence of a notice of 
deficiency.
    A comment described the notice and protest procedures in proposed 
Sec.  301.7803-3 as not applying when a taxpayer is ineligible for 
Appeals consideration because one of the exceptions listed in proposed 
Sec.  301.7803-2(c) applies to the taxpayer. This description is 
incorrect. As written and intended, proposed Sec.  301.7803-3 does not 
except such cases or issues from the notice and protest procedures. 
Thus, that one of the exceptions listed in proposed Sec.  301.7803-2(c) 
applies to a taxpayer does not prevent these procedures from applying 
if the taxpayer otherwise meets the requirements of proposed Sec.  
301.7803-3(a)(1) through (5), although it may be a reason why the 
request for referral to Appeals was denied. In response to the 
comments, the final regulations make clarifying edits to the text of 
Sec.  301.7803-3(a).

III. Comments on Topics That Are Outside the Scope of These Regulations

    Although the Explanation of Provisions of the proposed regulations 
discussed other new sections of the TFA, such as section 7803(e)(6) 
relating to Appeals' authority to obtain legal assistance and advice 
from Chief Counsel attorneys with regard to cases pending at Appeals, 
the proposed regulations stated that sections 7803(e)(4) and 7803(e)(5) 
were the primary focus of the guidance provided in the proposed 
regulations. Some comments received in response to the proposed 
regulations concerned topics and issues that are outside the scope of 
these final regulations.
    One such comment recommended that these final regulations include 
the assurances currently provided in subregulatory guidance regarding 
the ex parte rules; limitations on the IRS examination function or 
Appeals raising new issues; conference rights; or the longstanding 
policies regarding the reopening of mutual concession cases. A comment 
was offered on access to administrative files under new section 
7803(e)(7). Another comment recommended that the Treasury Department 
should adopt the National Taxpayer Advocate's proposal that a taxpayer 
has the right to a conference with Appeals that does not include 
personnel from Chief Counsel or the IRS examination function unless the 
taxpayer specifically consents to the participation of those parties in 
the conference, and another comment recommended that neither Appeals 
nor any IRS personnel involved in the Appeals conference should offer 
``nuisance'' settlement offers of zero or small numbers.
    The Treasury Department and the IRS do not adopt these comments 
because their topics are outside the scope of sections 7803(e)(4) and 
7803(e)(5), which were the primary focus of the proposed regulations. 
Section 7803(e)(4) provides for the general availability of Appeals 
consideration for taxpayers and section 7803(e)(5) provides for the 
limitation on designation of cases as not eligible for referral to 
Appeals. These comments do not address those areas and are already 
contained in other existing guidance. The IRS will consider and 
evaluate the comments for inclusion in the IRM or other guidance, as 
appropriate.

Special Analyses

I. Regulatory Planning and Review

    Pursuant to the Memorandum of Agreement, Review of Treasury 
Regulations under Executive Order 12866 (June 9, 2023), tax regulatory 
actions issued by the IRS are not subject to the requirements of 
section 6 of Executive Order 12866, as amended. Therefore, a regulatory 
impact assessment is not required.

II. Regulatory Flexibility Act

    In accordance with the Regulatory Flexibility Act (5 U.S.C. 601 et 
seq.) it is hereby certified that these regulations will not have a 
significant economic impact on a substantial number of small entities.
    These regulations affect any person who would like to have a 
Federal tax controversy considered by Appeals, including any small 
entity. Because any small entity could potentially request 
consideration by Appeals, these regulations are expected to affect a 
substantial number of small entities. However, the IRS has determined 
that the economic impact on small entities affected by these 
regulations would not be significant.
    The regulations provide procedural and timing requirements for 
consideration by Appeals. The regulations also establish the general 
availability of consideration by Appeals and exceptions to that 
consideration. The procedural requirements, timing requirements, and 
the vast majority of the exceptions to eligibility for consideration by 
Appeals already exist in previously established guidance regarding 
Appeals. The regulations also provide rules regarding certain 
circumstances in which a written explanation will be provided regarding 
why Appeals consideration was not provided. None of the regulations 
affect entities' substantive tax liability nor do they affect the 
process that Appeals follows when it considers an eligible Federal tax 
controversy. Any significant economic impact on small entities will 
result from the application of the substantive tax provisions and will 
not be a result of these final regulations. Accordingly, the Secretary 
hereby certifies that these regulations will not have a significant 
economic impact on a substantial number of small entities.
    Pursuant to section 7805(f) of the Code, the notice of proposed 
rulemaking was submitted to the Chief Counsel for the Office of 
Advocacy of the Small Business Administration for comment on its impact 
on small business, and no comments were received.

III. Unfunded Mandates Reform Act

    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) 
requires that agencies assess anticipated costs and benefits and take 
certain other actions before issuing a final rule that includes any 
Federal mandate that may result in expenditures in any one year by a 
State, local, or Indian tribal government, in the aggregate, or by the 
private sector, of $100 million (updated annually for inflation). These 
final regulations do not include any Federal mandate that may result in 
expenditures by State, local, or Indian tribal governments, or by the 
private sector in excess of that threshold.

IV. Executive Order 13132: Federalism

    Executive Order 13132 (Federalism) prohibits an agency from 
publishing any rule that has federalism implications if the rule either 
imposes substantial, direct compliance costs on State and

[[Page 3662]]

local governments, and is not required by statute, or preempts State 
law, unless the agency meets the consultation and funding requirements 
of section 6 of the Executive order. These final regulations do not 
have federalism implications and do not impose substantial direct 
compliance costs on State and local governments or preempt State law 
within the meaning of the Executive order.

V. Congressional Review Act

    Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), 
the Office of Information and Regulatory Affairs designated this rule 
as not a major rule as defined by 5 U.S.C. 804(2).

Statement of Availability of IRS Documents

    IRS Revenue Procedures, Revenue Rulings notices, and other guidance 
cited in this document are published in the Internal Revenue Bulletin 
(or Cumulative Bulletin) and are available from the Superintendent of 
Documents, U.S. Government Publishing Office, Washington, DC 20402, or 
by visiting the IRS website at https://www.irs.gov.

Drafting Information

    The principal author of these regulations is Joshua Hershman of the 
Office of the Associate Chief Counsel (Procedure and Administration). 
Other personnel from the Treasury Department and the IRS participated 
in their development.

List of Subjects in 26 CFR Part 301

    Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income 
taxes, Penalties, Reporting and recordkeeping requirements.

Adoption of Amendments to the Regulations

    Accordingly, the Treasury Department and the IRS amend 26 CFR part 
301 as follows:

PART 301--PROCEDURE AND ADMINISTRATION

0
Paragraph 1.The authority citation for part 301 is amended by adding 
entries in numerical order for Sec. Sec.  301.7803-2 and 301.7803-3 to 
read, in part, as follows:

    Authority:  26 U.S.C. 7805.
* * * * *
    Section 301.7803-2 is also issued under 26 U.S.C. 7803(e).
    Section 301.7803-3 is also issued under 26 U.S.C. 7803(e).
* * * * *

0
Par. 2. Sections 301.7803-2 and 301.7803-3 are added to read as 
follows:


Sec.  301.7803-2  Internal Revenue Service Independent Office of 
Appeals resolution of Federal tax controversies without litigation.

    (a) Function of the Internal Revenue Service Independent Office of 
Appeals. The Internal Revenue Service Independent Office of Appeals 
(Appeals) resolves Federal tax controversies without litigation on a 
basis that is fair and impartial to both the Government and the 
taxpayer, promotes a consistent application and interpretation of, and 
voluntary compliance with, the Federal tax laws, and enhances public 
confidence in the integrity and efficiency of the Internal Revenue 
Service (IRS).
    (b) Consideration of a Federal tax controversy by Appeals--(1) In 
general. The Appeals resolution process is generally available to all 
taxpayers to resolve Federal tax controversies.
    (2) Definition of Federal tax controversy. For purposes of this 
section, a Federal tax controversy is defined as a dispute over an 
administrative determination with respect to a particular taxpayer made 
by the IRS in administering or enforcing the internal revenue laws, 
related Federal tax statutes, and tax conventions to which the United 
States is a party (collectively referred to as internal revenue laws) 
that arises out of the examination, collection, or execution of other 
activities concerning the amount or legality of the taxpayer's income, 
employment, excise, or estate and gift tax liability; a penalty; or an 
addition to tax under the internal revenue laws. For purposes of this 
section, a Federal tax controversy includes, for example, a dispute 
over an administrative determination made by the IRS concerning a 
taxpayer's proposed deficiency, a taxpayer's claim for credit or 
refund, the tax-exempt nature of a particular organization, private 
foundation, or qualified employee plan under the internal revenue laws, 
or the status of a tax-exempt or other tax-advantaged bond.
    (3) Other administrative determinations treated as Federal tax 
controversies. Notwithstanding the definition of a Federal tax 
controversy in paragraph (b)(2) of this section, disputes over 
administrative determinations made by the IRS with respect to a 
particular person regarding the following topics are treated as Federal 
tax controversies for purposes of this section:
    (i) Liabilities and penalties administered by the IRS that are 
outside the Internal Revenue Code (Code), such as a liability or 
penalty pursuant to 31 U.S.C. 5321 (relating to Report of Foreign Bank 
and Financial Accounts or Bank Secrecy Act civil penalties);
    (ii) A request under the Freedom of Information Act (5 U.S.C. 552);
    (iii) Application to become, or the sanction of, an Electronic 
Return Originator or Authorized IRS e-file Provider;
    (iv) An IRS-proposed determination to a bond issuer that denies a 
claim for recovery of an asserted overpayment of arbitrage rebate, 
yield reduction payment, or penalty in lieu of rebate under section 148 
of the Code (relating to arbitrage) with respect to tax-exempt bonds or 
under section 148 as modified by relevant provisions of the Code with 
respect to other tax-advantaged bonds;
    (v) Administrative costs under section 7430 of the Code (relating 
to awarding of costs and certain fees); or
    (vi) Any other topic that the IRS has determined may be considered 
by Appeals.
    (c) Exceptions to consideration by Appeals. The following are 
Federal tax controversies that are excepted from consideration by 
Appeals or matters or issues that are otherwise ineligible for 
consideration by Appeals because they are neither a Federal tax 
controversy nor treated as a Federal tax controversy under paragraph 
(b)(3) of this section. If a matter or issue not eligible for 
consideration by Appeals is present in a case that otherwise is 
eligible for consideration by Appeals, the ineligible matter or issue 
will not be considered by Appeals during resolution of the case. The 
exceptions are:
    (1) Any administrative determination made by the IRS rejecting a 
position of a taxpayer that the IRS has identified as frivolous for 
purposes of section 6702(c) of the Code (regarding listing of frivolous 
positions) and any case solely involving the taxpayer's failure or 
refusal to comply with the internal revenue laws because of frivolous 
moral, religious, political, constitutional, conscientious, or similar 
grounds.
    (2) Penalties assessed by the IRS under section 6702 (relating to 
frivolous tax submissions) or section 6682 of the Code (relating to 
false information with respect to withholding) or any other penalty 
imposed for a frivolous position or false information. Appeals, 
however, may obtain verification that the assessment of the penalties 
complied with sections 6203 (relating to method of assessment) and 
6751(b) (relating to supervisory approval of assessment) of the Code in 
a collection due process (CDP) hearing under sections 6320 (relating to 
a hearing upon filing of a notice of lien) and 6330 (relating to a 
hearing before levy) of the Code.

[[Page 3663]]

Appeals also may consider a non-frivolous substantive challenge to a 
section 6702 or section 6682 penalty in a CDP hearing.
    (3) Any administrative determination made by the IRS under section 
7623 of the Code (relating to awards to whistleblowers).
    (4) Any administrative determination issued by an agency other than 
the IRS, such as a determination by the Alcohol and Tobacco Tax and 
Trade Bureau (TTB) concerning an excise tax administered by and within 
the jurisdiction of TTB.
    (5) Any decision made by the IRS not to issue a Taxpayer Assistance 
Order (TAO) under section 7811 of the Code (relating to TAOs).
    (6) Any decision made by the IRS concerning material to be deleted 
from the text of a written determination pursuant to section 6110 of 
the Code (relating to public inspection of written determinations) 
unless the written determination is otherwise being considered by 
Appeals.
    (7) Any denial of access under the Privacy Act (5 U.S.C. 
552a(d)(1)).
    (8) Any issue resolved in an agreement described in section 7121 of 
the Code (regarding closing agreements) that the taxpayer entered into 
with the IRS, and any decision made by the IRS to enter into or not 
enter into such agreement. Appeals may consider the question of whether 
an item or items are covered, and how the item or items are covered, in 
a closing agreement.
    (9) Any case in which the IRS erroneously returns or rejects an 
offer in compromise (OIC) submitted under section 7122 of the Code 
(relating to compromises) as nonprocessable or no longer processable 
and the taxpayer requests Appeals consideration to assert that the OIC 
should be deemed to be accepted under section 7122(f).
    (10) Any case in which a criminal prosecution, or a recommendation 
for criminal prosecution, is pending against the taxpayer for a tax-
related offense, except with the concurrence of the Office of Chief 
Counsel or the Department of Justice, as applicable.
    (11) Any issues relating to allocation among different fee payers 
of the branded prescription drug and health insurance providers fees in 
section 9008 of the Patient Protection and Affordable Care Act (PPACA), 
Public Law 111-148 (124 Stat. 119 (2010)), as amended by section 1404 
of the Health Care and Education Reconciliation Act of 2010 (HCERA), 
Public Law 111-152 (124 Stat. 1029 (2010)), and section 9010 of PPACA, 
as amended by section 10905 of PPACA, and as further amended by section 
1406 of HCERA.
    (12) Any certification or issuance of a notice of certification of 
a seriously delinquent Federal tax debt to the Department of State 
under section 7345 of the Code (relating to the revocation or denial of 
a passport in the case of serious tax delinquencies).
    (13) Any issue barred from consideration under section 6320 or 
section 6330, Sec. Sec.  301.6320-1 and 301.6330-1, or any other 
administrative guidance related to CDP hearings or equivalent hearings.
    (14) Any case, determination, matter, decision, request, or issue 
that Appeals lacks the authority to settle. The following is a non-
exclusive list of examples:
    (i) Any case or issue in a case that has been referred to the 
Department of Justice.
    (ii) Any competent authority case (including a competent authority 
resolution previously accepted by the taxpayer) under a United States 
tax treaty that is within the exclusive authority of the United States 
Competent Authority.
    (iii) Any decision of the Commissioner of Internal Revenue or the 
Commissioner's delegate to not rescind a penalty under section 6707A of 
the Code for a non-listed reportable transaction.
    (iv) Any request for relief under section 6015 of the Code 
(relating to relief from joint and several liability on a joint return) 
when the nonrequesting spouse is a party to a docketed case in the 
United States Tax Court (Tax Court) and does not agree to granting full 
or partial relief under section 6015 to the requesting spouse.
    (v) Any criminal restitution-based assessment under section 
6201(a)(4) of the Code (relating to certain orders of criminal 
restitution and restriction on challenge of assessment).
    (15) Any adverse action related to the initial or continuing 
recognition of tax-exempt status, an entity's classification as a 
foundation, the initial or continuing determination of employee plan 
qualification, or a determination involving an obligation and the 
issuer of an obligation under section 103 of the Code. The exception in 
this paragraph (c)(15) applies only if the tax-exempt recognition, 
classification, determination of employee plan qualification, or 
determination involving an obligation and the issuer of an obligation 
under section 103 is based upon a technical advice memorandum issued by 
an Office of Associate Chief Counsel before an appeal is requested.
    (16) Any case docketed in the Tax Court if the notice of 
deficiency, notice of liability, or final adverse determination letter 
is based upon a technical advice memorandum issued by an Office of 
Associate Chief Counsel in that case involving an adverse action 
described in paragraph (c)(15) of this section.
    (17) Any decision by an Office of Associate Chief Counsel regarding 
whether to issue a letter ruling or the content of a letter ruling. 
This includes decisions regarding requests for relief under Sec. Sec.  
301.9100-1 through 301.9100-22 and requests for a change in method of 
accounting. The subject of the letter ruling may be considered by 
Appeals if all other requirements in this section are met. For example, 
if an Office of Associate Chief Counsel issues an adverse letter ruling 
to a taxpayer, the taxpayer cannot immediately appeal the issuance of 
the adverse letter ruling. If the taxpayer subsequently files a return 
taking a position that is contrary to the letter ruling and that 
position is audited by the IRS, Appeals may consider that Federal tax 
controversy if all other requirements in this section are met.
    (18) Any issue based on a taxpayer's argument that a statute 
violates the United States Constitution unless there is an unreviewable 
decision from a Federal court holding that the cited statute is 
unconstitutional. For purposes of this paragraph (c)(18), an argument 
that a statute violates the United States Constitution includes any 
argument that a statute is unconstitutional on its face or as applied 
to a particular person. The exception in this paragraph (c)(18) does 
not preclude Appeals from considering a Federal tax controversy based 
on arguments other than the constitutionality of a statute, such as 
whether the statute applies to the taxpayer's facts and circumstances. 
For purposes of this section, the phrase unreviewable decision is a 
decision of any Federal court regardless of where the taxpayer resides 
that can no longer be appealed to any Federal court because all appeals 
in a case have been exhausted or the time to appeal has expired and no 
appeal was filed.
    (19) Any issue based on a taxpayer's argument that a Treasury 
regulation is invalid unless there is an unreviewable decision from a 
Federal court invalidating the regulation as a whole or the provision 
in the regulation that the taxpayer is challenging. The exception in 
this paragraph (c)(19) does not preclude Appeals from considering a 
Federal tax controversy based on arguments other than the validity of a 
Treasury regulation, such as whether the Treasury regulation applies to 
the taxpayer's facts and circumstances. For purposes of this paragraph 
(c)(19), the term invalid means any challenge to

[[Page 3664]]

validity, whether substantively invalid or procedurally invalid in 
scope. See paragraph (c)(20) of this section for definition of the term 
procedurally invalid.
    (20) Any issue based on a taxpayer's argument that a notice or 
revenue procedure published in the Internal Revenue Bulletin is 
procedurally invalid unless there is an unreviewable decision from a 
Federal court holding it to be invalid. This exception does not 
preclude Appeals from considering a Federal tax controversy based on 
arguments other than the procedural validity of a notice or revenue 
procedure, such as whether the notice or revenue procedure applies to 
the taxpayer's facts and circumstances. For purposes of this section, 
the term procedurally invalid is defined as any determination regarding 
whether a notice or revenue procedure failed to comply with 
administrative law requirements, such as notice and comment under 5 
U.S.C. 553.
    (21) Any case or issue designated for litigation, or withheld from 
Appeals consideration in a Tax Court case, in accordance with guidance 
regarding designating or withholding a case or issue. For purposes of 
this section, designated for litigation means that the Federal tax 
controversy, comprising an issue or issues in a case, will not be 
resolved without a full concession by the taxpayer or by decision of 
the court.
    (22) Any case docketed in the Tax Court if the notice of 
deficiency, notice of liability, or other determination was issued by 
Appeals unless the exception in paragraph (f)(1) of this section 
(regarding when the Tax Court remands a CDP case for reconsideration) 
applies.
    (23) Any case in which timely Appeals consideration must be 
requested before a petition is filed in the Tax Court because 
exhaustion of administrative review, including consideration by 
Appeals, is a prerequisite for the Tax Court to have jurisdiction, and 
the taxpayer failed to timely request Appeals consideration. For 
example, Appeals consideration must be requested before a petition is 
filed in the Tax Court regarding a declaratory judgment request under 
section 7428 (relating to declaratory judgment on the classification of 
specified organizations), section 7476 (relating to declaratory 
judgment on qualification of certain retirement plans), or section 7477 
(relating to declaratory judgment on the value of certain gifts) of the 
Code.
    (24) Any administrative determination made by the IRS to deny or 
revoke a Certified Professional Employer Organization certification.
    (d) Originating office has completed its review--(1) In general. 
Appeals consideration of a matter or issue is appropriate only after 
the originating IRS office has completed its action on the Federal tax 
controversy and issued an administrative determination or a proposed 
administrative determination accompanied by an offer for consideration 
by Appeals. If the originating office has not completed its action 
regarding the Federal tax controversy, the request for Appeals 
consideration is premature. Appeals may consider the Federal tax 
controversy if the taxpayer requests consideration after the 
originating office's action is complete and if all requirements in this 
section are met.
    (2) Exception for early consideration programs. If administrative 
guidance permits the originating office to engage Appeals prior to 
completing its action regarding the Federal tax controversy, Appeals 
may consider the Federal tax controversy under the terms of that 
administrative guidance, such as mediation under a fast track 
settlement program or early consideration of some issues under an early 
referral program.
    (e) Procedural and timing requirements are followed--(1) In 
general. A request for Appeals consideration of a Federal tax 
controversy must be submitted in the time and manner prescribed in 
applicable forms, instructions, or other administrative guidance. All 
procedural requirements must be complied with before Appeals will 
consider a Federal tax controversy. In addition, there must be 
sufficient time remaining on the appropriate limitations period for 
Appeals to consider the Federal tax controversy, as provided in 
administrative guidance. In a case docketed in the Tax Court, if the 
Office of Chief Counsel has recalled the case from Appeals or, if not 
recalled, Appeals has returned the case to the Office of Chief Counsel 
so that it is received by the Office of Chief Counsel prior to the date 
of the calendar call for the trial session, further consideration by 
Appeals will not be available if there is insufficient time for such 
consideration.
    (2) Example. The following example illustrates the application of 
the rule of insufficient time remaining on the limitations periods for 
Appeals consideration: The IRS examines Taxpayer X's Form 1040, U.S. 
Individual Income Tax Return, and determines a deficiency in income tax 
due to the IRS disallowing some of the deductions reported on the 
return. Because the expiration date of the assessment period of 
limitations with respect to the proposed deficiency is imminent, there 
is insufficient time for Appeals to receive the case and determine 
whether the case is susceptible to settlement. Consequently, the IRS 
issues a notice of deficiency under section 6212 of the Code to 
Taxpayer X. Under section 6213(a) of the Code, the issuance of this 
notice suspends the running of the assessment period while a taxpayer 
seeks judicial review of the notice. Taxpayer X timely files a petition 
with the Tax Court. After the case is docketed in the Tax Court, 
Taxpayer X generally would have the opportunity to have Appeals 
consider the case.
    (f) One opportunity for consideration by Appeals--(1) In general. 
If a Federal tax controversy is eligible for consideration by Appeals 
and the procedural and timing requirements are followed, a taxpayer 
generally has one opportunity for Appeals to consider such matter or 
issue in the same case for the same period or in any type of future 
case for the same period, unless the Tax Court remands for 
reconsideration in a CDP case. Appeals has considered a Federal tax 
controversy if the Federal tax controversy was before Appeals for 
consideration and Appeals issued a determination or made a settlement 
offer, Appeals decided the Federal tax controversy was not susceptible 
to settlement, or the person who requested consideration was issued and 
failed to respond to Appeals' communications and as a result of that 
failure Appeals issued or made a determination. Appeals also has 
considered a Federal tax controversy if the taxpayer notified the 
Office of Chief Counsel or the IRS that the taxpayer wanted to 
discontinue settlement consideration by Appeals or requested to 
transfer from Appeals to the Office of Chief Counsel settlement 
consideration of a Federal tax controversy that is currently before the 
Tax Court.
    (2) Exceptions. Notwithstanding paragraph (f)(1) of this section, 
taxpayers retain the opportunity for a traditional appeal after 
participating in an early consideration program as described in 
paragraph (d)(2) of this section if no agreement was reached between 
the taxpayer and the IRS originating office. Taxpayers may be able to 
request post-Appeals mediation under the terms of administrative 
guidance after a traditional appeal if no agreement was reached between 
the taxpayer and Appeals. Notwithstanding paragraph (f)(1), taxpayers 
who provide new factual information to the IRS and who meet the 
conditions and requirements for audit reconsideration or for 
reconsideration of issues

[[Page 3665]]

previously considered by Appeals may have an opportunity for Appeals 
consideration, as provided in administrative guidance.
    (g) Special rules. The following special rules apply to this 
section:
    (1) Appeals reconsideration. Notwithstanding the exception in 
paragraph (c)(22) of this section, if Appeals issued a notice of 
deficiency, notice of liability, or other determination without having 
fully considered one or more issues because of an impending expiration 
of the statute of limitations on assessment, Appeals may choose to have 
the Office of Chief Counsel return the case to Appeals for full 
consideration of the issue or issues once the case is docketed in the 
Tax Court.
    (2) Coordination between Office of Chief Counsel and Appeals. 
Appeals and the Office of Chief Counsel may determine how settlement 
authority in a Federal tax controversy that is before the Tax Court is 
transferred between the two offices.
    (h) Applicability date. This section is applicable to requests for 
consideration by Appeals made on or after February 14, 2025.


Sec.  301.7803-3  Requests for referral to the Internal Revenue Service 
Independent Office of Appeals following the issuance of a notice of 
deficiency.

    (a) Notice and protest. If any taxpayer requests consideration by 
the Internal Revenue Service Independent Office of Appeals (Appeals) of 
any matter or issue under section 7803(e)(5) of the Internal Revenue 
Code (Code) (relating to limitation on designation of cases as not 
eligible for referral to Appeals) and the request is denied, the 
Commissioner of Internal Revenue (Commissioner) or the Commissioner's 
delegate must provide the taxpayer a written notice that provides a 
detailed description of the facts involved, the basis for the decision 
to deny the request, a detailed explanation of how the basis for the 
decision applies to such facts, and the procedures for protesting the 
decision to deny the request, but only if the requirements of 
paragraphs (a)(1) through (5) of this section are met:
    (1) Notice of deficiency. The taxpayer received a notice of 
deficiency authorized under section 6212 of the Code (relating to 
notice of deficiency) before the taxpayer requested consideration by 
Appeals.
    (2) Frivolous positions. The issue involved is not a frivolous 
position within the meaning of section 6702(c) of the Code (regarding 
listing of frivolous positions).
    (3) Multiple requests for referral to Appeals. The taxpayer has not 
previously requested consideration by Appeals, pursuant to section 
7803(e)(5), of the same matter or issue in a taxable year or period.
    (4) Previous Appeals consideration. Appeals has not previously 
considered the matter or issue in a taxable year or period that is the 
subject of the request and determined that the matter or issue could 
not be settled or a settlement offer was rejected, except as provided 
in Sec.  301.7803-2(f)(2) with respect to a taxpayer participating in 
an early consideration program.
    (5) Notice of deficiency with more than one matter or issue. If the 
notice of deficiency for which the taxpayer requests Appeals 
consideration includes more than one matter or issue in a taxable year 
or period, the taxpayer must request referral for Appeals consideration 
and submit all such matters or issues at the same time.
    (b) Applicability date. This section is applicable to relevant 
requests for consideration by Appeals made on or after February 14, 
2025.

Douglas W. O'Donnell,
Deputy Commissioner.

    Approved: January 3, 2025.
Aviva R. Aron-Dine,
Deputy Assistant Secretary of the Treasury (Tax Policy).
[FR Doc. 2025-00426 Filed 1-14-25; 8:45 am]
BILLING CODE 4830-01-P