# 26 U.S.C. § 7123: Appeals dispute resolution procedures

Source: OLRC release point 119-134 <https://uscode.house.gov/us/usc/119-134/t26/s7123>. Cite pinpoints as 26 U.S.C. § 7123(a)(1).

## § 7123(a) Early referral to appeals procedures

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

## § 7123(b) Alternative dispute resolution procedures

**§ 7123(b)(1) Mediation.** The Secretary shall prescribe procedures under which a taxpayer or the Internal Revenue Service Independent Office of Appeals may request non-binding mediation on any issue unresolved at the conclusion of—

**§ 7123(b)(1)(A)** appeals procedures; or

**§ 7123(b)(1)(B)** unsuccessful attempts to enter into a closing agreement under section 7121 or a compromise under section 7122.

**§ 7123(b)(2) Arbitration.** The Secretary shall establish a pilot program under which a taxpayer and the Internal Revenue Service Independent Office of Appeals may jointly request binding arbitration on any issue unresolved at the conclusion of—

**§ 7123(b)(2)(A)** appeals procedures; or

**§ 7123(b)(2)(B)** unsuccessful attempts to enter into a closing agreement under section 7121 or a compromise under section 7122.

## § 7123(c) Administrative appeal relating to adverse determination of tax-exempt status of certain organizations

**§ 7123(c)(1) In general.** The Secretary shall prescribe procedures under which an organization which claims to be described in section 501(c) may request an administrative appeal (including a conference relating to such appeal if requested by the organization) to the Internal Revenue Service Independent Office of Appeals of an adverse determination described in paragraph (2).

**§ 7123(c)(2) Adverse determinations.** For purposes of paragraph (1), an adverse determination is described in this paragraph if such determination is adverse to an organization with respect to—

**§ 7123(c)(2)(A)** the initial qualification or continuing qualification of the organization as exempt from tax under section 501(a) or as an organization described in section 170(c)(2),

**§ 7123(c)(2)(B)** the initial classification or continuing classification of the organization as a private foundation under section 509(a), or

**§ 7123(c)(2)(C)** the initial classification or continuing classification of the organization as a private operating foundation under section 4942(j)(3).

## Connections

Cites: § 170 Charitable, etc., contributions and gifts; § 501 Exemption from tax on corporations, certain trusts, etc.; § 509 Private foundation defined; § 4942 Taxes on failure to distribute income; § 7121 Closing agreements; § 7122 Compromises

Cited by: none

## Prior provisions

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

## Amendments

- 1998-07-22: [Pub. L. 105-206](/26/act/105-206.md), 112 Stat. 768
- 2015-12-18: [Pub. L. 114-113](/26/act/114-113.md), 129 Stat. 3118
- 2019-07-01: [Pub. L. 116-25](/26/act/116-25.md), 133 Stat. 985