In Revenue Procedure 2015-44 the IRS has officially terminated the Appeals arbitration program that was currently running with Revenue Procedure 2006-44.  The program was mandated by Congress in IRC §7123(b)(2) where Congress ordered the IRS to establish a pilot program for arbirtration.

Why did the IRS shut down the program?  It turns out that it simply wasn’t working to resolve issues.  The IRS noted during the fourteen-year period the program ran only two cases were settled via arbitration.

The procedure does point out “taxpayers may be eligible to request mediation for unresolved issues that remain after completion of settlement discussions in Appeals.”  The revenue procedure refers taxpayers to Revenue Procedure 2014-63 for information on the mediation program.