Internal Revenue Bulletin 2025-11 (PDF rendition): IRS Revenue Rulings

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Bulletin No. 2025–11
March 10, 2025
HIGHLIGHTS
OF THIS ISSUE
These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.
ADMINISTRATIVE
T.D. 10030, page 1066.
These regulations implement section 7803(e). 26 C.F.R.
301.7803-2 states that consideration of a Federal tax con-
troversy by the Independent Office of Appeals is generally
available to all taxpayers, sets forth a list of exceptions to
Appeals consideration, and provides procedural and timing
requirements that must be met before Appeals will consider
an issue. 26 C.F.R. 301.7803-3 describes notice and pro-
test rights for a taxpayer in receipt of a notice of deficiency
who requests consideration by Appeals and that request is
denied.
EXCISE TAX
Notice 2025-15, page 1089.
This notice provides guidance regarding the alternative man-
ner of furnishing certain health insurance coverage state-
ments to individuals pursuant to sections 6055(c)(3) and
6056(c)(3) of the Internal Revenue Code (Code), added by
section 2 of the Paperwork Burden Reduction Act (Pub. L.
118-167, 138 Stat. 2584, Dec. 23, 2024) (the Act).
Section 2 of the Act directs the Treasury Department and
the IRS to provide the time and manner in which a reporting
entity can provide clear, conspicuous, and accessible notice,
detailing an individual’s ability to request certain health insur-
ance coverage statements in lieu of the reporting entity pro-
viding the statements to all individuals, to satisfy the alterna-
tive manner of furnishing certain health insurance coverage
statements to individuals pursuant to sections 6055(c)(3)
and 6056(c)(3) of the Code.
INCOME TAX
Rev. Proc. 2025-15, page 1090.
This revenue procedure provides discount factors for the
2024 accident year for use by insurance companies in com-
puting discounted unpaid losses under § 846 of the Internal
Revenue Code and discounted estimated salvage recover-
able under § 832.
Rev. Proc. 2025-16, page 1100.
This revenue procedure provides: (1) two tables of limita-
tions on depreciation deductions for owners of passenger
automobiles placed in service by the taxpayer during cal-
endar year 2025; and (2) a table of dollar amounts that
must be used to determine income inclusions by lessees
of passenger automobiles with a lease term beginning in
calendar year 2025. The tables detailing these depreciation
limitations and amounts used to determine lessee income
inclusions reflect the automobile price inflation adjustments
required by section 280F(d)(7). For purposes of this reve-
nue procedure, the term “passenger automobiles” includes
trucks and vans.
Rev. Rul. 2025-6, page 1064.
Federal rates; adjusted federal rates; adjusted federal long-
term rate, and the long-term tax exempt rate. For purposes
of sections 382, 1274, 1288, 7872 and other sections of
the Code, tables set forth the rates for March 2025.
Finding Lists begin on page ii.

The IRS Mission
Provide America’s taxpayers top-quality service by helping
them understand and meet their tax responsibilities and
enforce the law with integrity and fairness to all.
Introduction
The Internal Revenue Bulletin is the authoritative instrument
of the Commissioner of Internal Revenue for announcing offi-
cial rulings and procedures of the Internal Revenue Service
and for publishing Treasury Decisions, Executive Orders, Tax
Conventions, legislation, court decisions, and other items of
general interest. It is published weekly.
It is the policy of the Service to publish in the Bulletin all sub-
stantive rulings necessary to promote a uniform application
of the tax laws, including all rulings that supersede, revoke,
modify, or amend any of those previously published in the
Bulletin. All published rulings apply retroactively unless other-
wise indicated. Procedures relating solely to matters of inter-
nal management are not published; however, statements of
internal practices and procedures that affect the rights and
duties of taxpayers are published.
Revenue rulings represent the conclusions of the Service
on the application of the law to the pivotal facts stated in
the revenue ruling. In those based on positions taken in rul-
ings to taxpayers or technical advice to Service field offices,
identifying details and information of a confidential nature are
deleted to prevent unwarranted invasions of privacy and to
comply with statutory requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned
against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—1986 Code.
This part includes rulings and decisions based on provisions
of the Internal Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A,
Tax Conventions and Other Related Items, and Subpart B,
Legislation and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative
Rulings. Bank Secrecy Act Administrative Rulings are issued
by the Department of the Treasury’s Office of the Assistant
Secretary (Enforcement).
Part IV.—Items of General Interest.
This part includes notices of proposed rulemakings, disbar-
ment and suspension lists, and announcements.
The last Bulletin for each month includes a cumulative index
for the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.
The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
March 10, 2025 Bulletin No. 2025–11

Part I
Section 1274.—
Determination of Issue
Price in the Case of Certain
Debt Instruments Issued for
Property
(Also, Sections 42, 280G, 382, 467, 468, 482, 483,
1288, 7520, 7872.)
Rev. Rul. 2025-6
This revenue ruling provides various
prescribed rates for federal income tax
purposes for March 2025 (the current
month). Table 1 contains the short-
term, mid-term, and long-term applica-
ble federal rates (AFR) for the current
month for purposes of section 1274(d)
of the Internal Revenue Code. Table 2
contains the short-term, mid-term, and
long-term adjusted applicable federal
rates (adjusted AFR) for the current
month for purposes of section 1288(b).
Table 3 sets forth the adjusted fed-
eral long-term rate and the long-term
tax-exempt rate described in section
382(f). Table 4 contains the appropri-
ate percentages for determining the
low-income housing credit described in
section 42(b)(1) for buildings placed in
service during the current month. How-
ever, under section 42(b)(2), the appli-
cable percentage for non-federally sub-
sidized new buildings placed in service
after July 30, 2008, shall not be less
than 9%. Finally, Table 5 contains the
federal rate for determining the present
value of an annuity, an interest for life
or for a term of years, or a remainder or
a reversionary interest for purposes of
section 7520.
REV. RUL. 2025-6 TABLE 1
Applicable Federal Rates (AFR) for March 2025
Period for Compounding
AnnualSemiannualQuarterlyMonthly
Short-term
AFR4.31%4.26%4.24%4.22%
110% AFR4.74%4.69%4.66%4.64%
120% AFR5.18%5.11%5.08%5.06%
130% AFR5.62%5.54%5.50%5.48%
Mid-term
AFR4.46%4.41%4.39%4.37%
110% AFR 4.91%4.85%4.82%4.80%
120% AFR5.36%5.29%5.26%5.23%
130% AFR5.81%5.73%5.69%5.66%
150% AFR6.73%6.62%6.57%6.53%
175% AFR7.87%7.72%7.65%7.60%
Long-term
AFR4.82%4.76%4.73%4.71%
110% AFR5.31%5.24%5.21%5.18%
120% AFR5.79%5.71%5.67%5.64%
130% AFR6.29%6.19%6.14%6.11%
REV. RUL. 2025-6 TABLE 2
Adjusted AFR for March 2025
Period for Compounding
AnnualSemiannualQuarterlyMonthly
Short-term adjusted AFR3.26%3.23%3.22%3.21%
Mid-term adjusted AFR3.38%3.35%3.34%3.33%
Long-term adjusted AFR3.64%3.61%3.59%3.58%
March 10, 2025 1064 Bulletin No. 2025–11

REV. RUL. 2025-6 TABLE 3
Rates Under Section 382 for March 2025
Adjusted federal long-term rate for the current month3.64%
Long-term tax-exempt rate for ownership changes during the current month (the highest of the adjusted federal
long-term rates for the current month and the prior two months.)
3.67%
REV. RUL. 2025-6 TABLE 4
Appropriate Percentages Under Section 42(b)(1) for March 2025
Note: Under section 42(b)(2), the applicable percentage for non-federally subsidized new buildings placed in service after
July 30, 2008, shall not be less than 9%.
Appropriate percentage for the 70% present value low-income housing credit8.08%
Appropriate percentage for the 30% present value low-income housing credit 3.46%
REV. RUL. 2025-6 TABLE 5
Rate Under Section 7520 for March 2025
Applicable federal rate for determining the present value of an annuity, an interest for life or a term of years,
or a remainder or reversionary interest
5.4%

Section 42.—Low-Income
Housing Credit
The applicable federal short-term, mid-term,
and long-term rates are set forth for the month of
March 2025. See Rev. Rul. 2025-6, page 1064.
Section 280G.—Golden
Parachute Payments
The applicable federal short-term, mid-term,
and long-term rates are set forth for the month of
March 2025. See Rev. Rul. 2025-6, page 1064.
Section 382.—Limitation
on Net Operating Loss
Carryforwards and
Certain Built-In Losses
Following Ownership
Change
The adjusted applicable federal long-term rate
is set forth for the month of March 2025. See Rev.
Rul. 2025-6, page 1064.
Section 467.—Certain
Payments for the Use of
Property or Services
The applicable federal short-term, mid-term,
and long-term rates are set forth for the month of
March 2025. See Rev. Rul. 2025-6, page 1064.
Section 468.—Special
Rules for Mining and Solid
Waste Reclamation and
Closing Costs
The applicable federal short-term rates are set
forth for the month of March 2025. See Rev. Rul.
2025-6, page 1064.
Section 482.—Allocation
of Income and Deductions
Among Taxpayers
The applicable federal short-term, mid-term,
and long-term rates are set forth for the month of
March 2025. See Rev. Rul. 2025-6, page 1064.
Section 483.—Interest on
Certain Deferred Payments
The applicable federal short-term, mid-term,
and long-term rates are set forth for the month of
March 2025. See Rev. Rul. 2025-6, page 1064.
Section 1288.—Treatment
of Original Issue Discount
on Tax-Exempt Obligations
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month of
March 2025. See Rev. Rul. 2025-6, page 1064.
Section 7520.—Valuation
Tables
The applicable federal mid-term rates are set
forth for the month of March 2025. See Rev. Rul.
2025-6, page 1064.
Section 7872.—Treatment
of Loans With Below-
Market Interest Rates
The applicable federal short-term, mid-term,
and long-term rates are set forth for the month of
March 2025. See Rev. Rul. 2025-6, page 1064.

Bulletin No. 2025–11 1065 March 10, 2025

March 10, 2025 1066 Bulletin No. 2025–11
26 C.F.R. 301.7803-2; 26 C.F.R. 301.7803-3
T.D. 10030
DEPARTMENT OF THE
TREASURY
Internal Revenue Service
26 CFR Part 301
Resolution of Federal
Tax Controversies by the
Independent Office of
Appeals
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Final regulation.
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 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 tax-
payers requesting Appeals consideration
of Federal tax controversies.
DATES: Effective date: These regulations
are effective on January 15, 2025.
Applicability date: The regulations in
§§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 del-
egates to the Secretary of the Treasury or
her delegate (Secretary) the authority to
“prescribe all needful rules and regula-
tions 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 interpreta-
tion 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 contro-
versies as stated in section 7803(e)(4). The
proposed regulations defined what consti-
tutes a Federal tax controversy involving
disputes over administrative determina-
tions made by the IRS and, consistent
with the historical practice and functions
of Appeals, listed certain additional top-
ics involving disputes over administrative
determinations by the IRS that are treated
as Federal tax controversies. Proposed
§301.7803-2(c)(1) through (24) also pro-
posed 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 excep-
tions in proposed §301.7803-2(c), such as
proposed §301.7803-2(c)(1), (2), and (3),
for example, as “Exception 1,” “Excep-
tion 2,” and “Exception 3.”
Additionally, the proposed regulations
proposed certain procedural and timing
rules that must be met before Appeals con-
sideration is available: the originating IRS
office must have completed its review; a
taxpayer must have submitted the request
for Appeals consideration in the pre-
scribed 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 Fed-
eral tax controversy is eligible for con-
sideration 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 determina-
tion, 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 Coun-
sel) return the case to Appeals for full con-
sideration 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 set-
tlement authority is transferred between
the two offices. Similar prerequisites to
Appeals consideration as those described
in this paragraph existed before the enact-
ment 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 Man-
ual (IRM) relating to requests for relief
under §§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 pro-
posed 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

Bulletin No. 2025–11 1067 March 10, 2025
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 com-
ments and hearing testimony, the Trea-
sury 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, includ-
ing non-substantive clarifications, to the
proposed regulations.
Summary of Comments and
Explanation of Revisions
I. Proposed §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
§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 Depart-
ment and the IRS to provide exceptions to
Appeals consideration. A comment agreed
that the statutory text and legislative his-
tory of the TFA confirm Congress did not
intend for Appeals access to be univer-
sally available. This comment supported
the proposed regulations’ identification
of particular situations in which Appeals
access should not be available. While dis-
agreeing with Exception 19 (Challenges
Alleging That a Treasury Regulation Is
Invalid) and Exception 20 (Challenges
Alleging That a Notice or Revenue Pro-
cedure Is Invalid) and exceptions for 9100
relief and CAMs, another comment gener-
ally agreed with the Treasury Department
and the IRS that not every case is appro-
priate 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 exclu-
sions in the proposed regulations should
be accepted and specifically mentioned
penalties and determinations under sec-
tions 6702 or 6682 of the Code. Other
comments stated that the proposed excep-
tions 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 (Chal-
lenges Alleging That a Statute Is Uncon-
stitutional), 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 taxpay-
ers a statutory right to Appeals, and two
comments claimed exceptions to review
by Appeals would inappropriately restrict
Appeals access and suggested the pro-
posed regulations should instead expand
Appeals access.
As explained in more detail in section
I.C. of the proposed regulations’ Expla-
nation of Provisions, Congress did not
provide for an absolute right to adminis-
trative 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 statu-
tory language, TFA’s legislative history
also reflects the intention of Congress
that the Treasury Department and the IRS
retain their historical discretion to deter-
mine 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 contro-
versy is appropriate for the Appeals reso-
lution 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 com-
pliance, and ensuring consistent appli-
cation and interpretation of Federal tax
laws. Resolution of tax controversies in
this manner is generally available to all
taxpayers, subject to reasonable excep-
tions 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 sugges-
tion, 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 Trea-
sury Department and the IRS retain their
historical discretion to determine whether
the resolution of particular types of dis-
putes 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 con-
sideration adversely affects the indepen-
dence or impartiality of Appeals. Some
of the comments specifically asserted that
prohibiting Appeals from considering
validity challenges to a regulation, notice,

March 10, 2025 1068 Bulletin No. 2025–11
or revenue procedure as set forth in Excep-
tion 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 impartial-
ity of Appeals for matters or issues under
consideration. If a matter is not reviewed
by Appeals, there is no independent analy-
sis 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 reason-
able rationales. Additionally, the proposed
regulations and these final regulations
reinforce the statutory presumption that
Federal tax controversies may be consid-
ered by Appeals and require a regulatory
exception for consideration to be unavail-
able.
The same comment suggested there
would be no “whipsaw” if Appeals set-
tles 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 Govern-
ment 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 regu-
lations 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 with-
out expensive litigation. A comment
asserted the establishment of Appeals was
an attempt by Congress to make resolv-
ing 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 taxpay-
ers. 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 consider-
ation will still be available for most cases,
which can be resolved without litigation
(or without further litigation if the tax-
payer has petitioned the Tax Court). The
proposed regulations’ procedural require-
ments, timing requirements, and almost
all of the exceptions to consideration by
Appeals already exist in previously estab-
lished guidance regarding Appeals. As
in the past, the proposed exceptions are
limited in number and scope. The vast
majority of taxpayers, including low-in-
come 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 Gov-
ernment 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 deci-
sion by Appeals that is applicable and
communicated only to one taxpayer, a
final decision from a Federal court is pub-
licly available and applied consistently to
all taxpayers. As a result, these exceptions
promote efficiency rather than wasting
taxpayer and Government resources. Fur-
thermore, 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. Commis-
sioner, 596 U.S. 199 (2022) defined lim-
its 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 con-
servative 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 mean-
ing of section 7803(e) or the availability
of Appeals review. Instead, these cases
address different issues and have no bear-
ing on these regulations.
Another comment noted that litigation
arguing that the TFA provides taxpay-
ers 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 Trea-
sury 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 con-
sideration 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 regula-
tions, in particular, Exception 3 (Whis-
tleblower Awards); Exception 4 (Admin-
istrative Determinations Made by Other
Agencies); Exception 7 (Denial of Access
Under the Privacy Act); and Exception

Bulletin No. 2025–11 1069 March 10, 2025
14 (Authority Over the Matter Rests
With Another Office) leave a taxpayer
without any administrative recourse. The
comment suggested an interagency dis-
cussion over how and whether adminis-
trative appeals processes, whether resid-
ing 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 lan-
guage 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 (Jus-
tice Department). See sections I.D.2., 3.,
4., and 8. of this Summary of Comments
and Explanation of Revisions. The dis-
putes involved in Exception 3, Exception
4, and Exception 7 are not Federal tax
controversies, and Appeals lacks settle-
ment 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 Excep-
tion 14 in the list of proposed exceptions
in proposed §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 sug-
gested 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 exam-
ination. Accordingly, these final regula-
tions do not adopt this comment.
B. Definition of a Federal Tax
Controversy: Proposed §301.7803-2(b)
(2)
Section 7803(e)(3) provides that the
function of Appeals is “to resolve Federal
tax controversies without litigation,” with-
out defining the term “Federal tax con-
troversy.” Proposed §301.7803-2(b)(1),
consistent with the statutory text of sec-
tion 7803(e)(4), provides that the Appeals
resolution process is generally available to
all taxpayers to resolve Federal tax con-
troversies. Proposed §301.7803-2(b)(2)
defined a Federal tax controversy as a dis-
pute 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 regula-
tions 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 determi-
nation that an organization is not tax-ex-
empt 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-ex-
empt 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 partici-
pants; 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 chari-
table trust under section 4947(a)(1) of the
Code as described in section 509(a)(3) of
the Code; the classification or reclassifica-
tion of the organization as an exempt oper-
ating foundation under section 4940(d)
(2) of the Code; relief from retroactive
revocation or modification of a determi-
nation letter under section 7805(b) of the
Code; denials of relief requested under
§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 sta-
tus 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 §301.7803-2(b)(3)
Proposed §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
§301.7803-2(b)(3) are treated as Federal
tax controversies.
1. Additional Disputes Treated as
Federal Tax Controversies: Proposed
§301.7803-2(b)(3)(iv) through (vi)
As explained previously in section I.B.
of this Summary of Comments and Expla-
nation of Revisions, the final regulations
clarify that the definition of Federal tax
controversy includes determinations con-
cerning the status of tax-exempt organi-
zations, private foundations, and qual-
ified plans, and the status of tax-exempt
or other tax-advantaged bonds. Accord-
ingly, the final regulations delete these
items from proposed §301.7803-2(b)(3)
(iv) through (vi), because inclusion would
be unnecessary and duplicative. The final
regulations retain the language in pro-
posed §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 §301.7803-2(b)(2). That lan-
guage is now included in the final regula-
tions and redesignated as §301.7803-2(b)
(3)(iv).
2. FOIA Cases Treated as Federal Tax
Controversies: Proposed §301.7803-
2(b)(3)(ii)
One comment was received on pro-
posed §301.7803-2(b)(3)(ii) relating to a
request under the Freedom of Information
Act (5 U.S.C. 552) (FOIA). This com-
ment recommended removing proposed
§301.7803-2(b)(3)(ii) because FOIA does
not affect the collection of taxes or the lia-
bility for taxes of the FOIA requester. The

March 10, 2025 1070 Bulletin No. 2025–11
Treasury Department and the IRS do not
adopt this recommendation. Appeals con-
sideration of IRS administrative determi-
nations listed in proposed §301.7803-2(b)
(3), including in proposed §301.7803-2(b)
(3)(ii), is consistent with the historical
practice and functions of Appeals as codi-
fied in section 7803(e)(3). See §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 consid-
eration by Appeals. The TFA does not
prohibit Appeals from reviewing deter-
minations 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 §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 determina-
tion made by the IRS with respect to a par-
ticular 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 tax-
payer 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 sec-
tion 6682 of the Code. A second comment
alleged the exceptions would curtail the
independence of Appeals by eliminating
its right to review determinations of friv-
olousness because such determinations
are not infallible. That comment recom-
mended Appeals should have the option,
but not the obligation, to decide whether
positions have been wrongly labeled friv-
olous to strike a balance between its inde-
pendence 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 tax-
payer’s position as frivolous or wrongly
imposed a frivolous filing penalty. Refer-
ring every frivolous argument to Appeals
upon the request of a taxpayer, for
Appeals to then determine whether or not
to grant consideration, would be unneces-
sarily 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 exist-
ing restrictions precluding the consider-
ation of frivolous positions by Appeals
that can be found in §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) (relat-
ing to frivolous issues). There are sound
policy reasons for these historic limita-
tions. As explained in sections I.C.1. and
2. of the proposed regulations’ Explana-
tion of Provisions, Appeals consideration
of frivolous positions would facilitate
abuse of the tax system by allocating IRS
and Appeals resources to reviewing posi-
tions 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 posi-
tion, 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 restric-
tion in section 7803(e)(5)(D) that the
notice and protest procedures under sec-
tion 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 the Code relat-
ing to awards to whistleblowers.
The first comment suggested creating
an interagency administrative review pro-
cess, and it is discussed in section I.A. of
this Summary of Comments and Explana-
tion of Revisions.
The second comment asserted that the
authority relied upon for Exception 3 is
the proposed definition of Federal tax con-
troversy in the proposed regulations and
alleged that the language of the TFA autho-
rizes Appeals to review whistleblower mat-
ters. 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 excep-
tions was to clarify the point that section
7803(e) does not cover whistleblower
awards because they do not involve a Fed-
eral 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 examina-
tion, collection, or execution of other activ-
ities with respect to the whistleblower’s tax
liability. This award determination is sep-
arate 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 consider-

Bulletin No. 2025–11 1071 March 10, 2025
ation is not available for an administrative
determination issued by an agency other
than the IRS. An example is a determina-
tion by the Alcohol and Tobacco Tax and
Trade Bureau (TTB) concerning an excise
tax administered by and within its juris-
diction. The comment suggested creating
an interagency administrative review pro-
cess, and it is discussed in section I.A. of
this Summary of Comments and Explana-
tion of Revisions.
4. Denials of Access Under the Privacy
Act: Exception 7
One comment was received on Excep-
tion 7, which provides that Appeals con-
sideration is not available for any dispute
regarding a determination of the IRS
resulting in denial of access under the Pri-
vacy Act (5 U.S.C. 552a(d)(1)) (relating to
access to records) to a particular person.
The comment suggested creating an inter-
agency 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 compro-
mise (OIC) submitted under section 7122
as nonprocessable. As explained in sec-
tion 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 deter-
mination regarding the OIC, there is no
administrative determination made by the
IRS for Appeals to review.
Two comments were received con-
cerning OICs. The first comment recom-
mended that Appeals should be autho-
rized 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 taxpay-
ers 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 recom-
mendation is not consistent with the
function of Appeals, which is to weigh
litigation hazards in applying the law
to specific facts. Reviewing the com-
pleteness 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
§301.7803-2(d)(1) because the origi-
nating IRS office has not completed its
action. It has been a longstanding prac-
tice of the IRS to return incomplete or
otherwise nonprocessable OICs that tax-
payers 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 taxpay-
ers 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 errone-
ously returns or rejects an OIC as nonpro-
cessable 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 suffi-
ciently meet the administrative goals of
the rule.
6. Criminal Prosecution Is Pending
Against Taxpayer: Exception 10
One comment was submitted on Excep-
tion 10, which provides that Appeals con-
sideration 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 transac-
tions. The Treasury Department and the
IRS do not adopt this comment. Excep-
tion 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 situ-
ations addressed in the comment because
if they were to arise, Chief Counsel and/
or the Justice Department could determine
whether concurrence would be appropri-
ate 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
with a pending criminal matter. It would
also be contrary to regulations under 26
CFR part 601, which provide general pro-
cedural rules for Appeals functions and
limit Appeals’ authority to act in a case
in which criminal prosecution is recom-
mended, except with the concurrence of
Chief Counsel. See §601.106(a)(2)(vi).
7. IRS’s Automated Process of
Certifying a Seriously Delinquent Tax
Debt: Exception 12
One comment was received on Excep-
tion 12, which provides that consideration
by Appeals is not available for the certifica-
tion 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 revoca-

March 10, 2025 1072 Bulletin No. 2025–11
tion or denial of a taxpayer’s passport in
the case of serious tax delinquencies).
According to the comment, if Appeals con-
sideration 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 con-
tends 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/taxpay-
er-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 Revi-
sions, 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 Excep-
tion 14. Exception 14 provides that con-
sideration 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 §301.7803-2(c)(14)(i)
through (v) provides a non-exclusive list
of examples illustrating this rule, includ-
ing the example in proposed §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 Jus-
tice Department. The comment suggested
creating an interagency administrative
review process, which is discussed in sec-
tion I.A. of this Summary of Comments
and Explanation of Revisions. The set-
tlement 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 con-
cerning Exception 15 and Exception
16. Exception 15 provides that Appeals
consideration is not available for cer-
tain adverse actions related to the initial
or continuing recognition of tax-exempt
status, an entity’s classification as a foun-
dation, the initial or continuing determi-
nation of employee plan qualification, or
a determination involving an obligation
and the issuer of an obligation under sec-
tion 103 of the Code, when the adverse
action is based upon a technical advice
memorandum (TAM) issued by an Asso-
ciate 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 sug-
gested a change but did not provide a ratio-
nale for a change, refute the rationale given
in the proposed regulations, or explain its
conclusion that the two proposed excep-
tions would unnecessarily narrow Appeals
review. As reflected in the proposed regu-
lations’ Explanation of Provisions in sec-
tions 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 determi-
nations in Exception 15 and Exception 16
are the subject of a TAM from an Associ-
ate Office, they are excepted from Appeals
consideration because traditionally Chief
Counsel has exclusive authority over the
dispute administratively or upon litiga-
tion. 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 applica-
ble 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 classifica-
tion as a foundation, the initial or continu-
ing determination of employee plan qual-
ification, 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 his-
torical practice as found in §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 Appeals

Bulletin No. 2025–11 1073 March 10, 2025
consideration a decision by an Associate
Office regarding whether to issue a let-
ter 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 §301.7803-2 are met. For
example, if the taxpayer subsequently
files a return taking a position that is con-
trary to the letter ruling and that position
is examined by the IRS, Appeals could
consider that Federal tax controversy if
all other requirements in §301.7803-2 are
met.
The first comment stated that the pro-
vision in Exception 17 helpfully makes
clear that the subject of the letter ruling
may be considered by Appeals if all other
requirements in proposed §301.7803-2
are met, and recommended that this pro-
vision should be strengthened to offer an
affirmative safe harbor for appeals for tax-
payers who in good faith attempt to fulfill
the terms of §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 require-
ments would not be sufficient. A taxpayer
must comply with all the requirements
in §301.7803-2 in order to have Appeals
consider the taxpayer’s Federal tax con-
troversy. The second comment on Excep-
tion 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 stat-
ute 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 consid-
ering 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 circum-
stances.
Proposed §301.7803-2(c)(18) defined
the phrase unreviewable decision as a deci-
sion 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 unre-
viewable 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 unreview-
able decision” has been deleted in the final
regulations because it is inaccurate in cer-
tain circumstances. For example, even if
a district court grants a motion to dismiss
and the decision is appealed and a rever-
sal of that motion becomes unreviewable,
the case would have further action such
as discovery, dispositive motions, or trial.
See §301.7803-2(c)(18).
The Treasury Department and the IRS
received several comments on Excep-
tion 18. One comment agreed with Excep-
tion 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 rec-
ommended 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 Excep-
tion 18 strips taxpayers of a statutory
right to Appeals. The other objected that
Exception 18 improperly restricts access
to Appeals and forces taxpayers to sacri-
fice legal arguments.
The Treasury Department and the IRS
do not adopt these two comments; Excep-
tion 18 is consistent with the TFA. As
discussed previously, the TFA does not
provide an absolute statutory right to an
administrative appeal. Rather, the Trea-
sury Department and the IRS have the
statutory authority to provide exceptions
to Appeals consideration. Exception 18 is
one such exception, and it is narrowly tai-
lored and supported with reasonable ratio-
nales. 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’ Explana-
tion of Provisions, namely that questions
within the IRS regarding the constitu-
tionality 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 Trea-
sury Department and the IRS, in consulta-
tion 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 his-
torically analyzed legal arguments con-
cerning tax statutes, regulations, and IRS
procedures and so Appeals is capable of
considering these arguments. This com-
ment insinuated that Exception 18, Excep-
tion 19, and Exception 20 are premised on
Appeals’ training, skills, or competency to
review legal arguments related to statutes,
regulations, or IRS procedures. The ratio-
nales 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 stat-
utes, 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 unre-
viewable decision only from a Federal
court within the circuit in which the tax-
payer resides. Neither the proposed regu-
lations, 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 unre-

March 10, 2025 1074 Bulletin No. 2025–11
viewable decision. The comment inter-
preted the phrase as the proposed regula-
tions 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 §301.7803-2(c)(18).
A comment recommended the final reg-
ulations modify the definition of unreview-
able 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 relevant decision that would bind
the taxpayer and the Government if the dis-
pute 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 Depart-
ment or the Solicitor General. The com-
ment’s reference to the Justice Depart-
ment 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 com-
ment appeared to suggest that Appeals
should be able to do the same in fulfilling
its function of considering hazards of lit-
igation.
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 dis-
tinct functions and roles does not mean
employees of Appeals, like Appeals Offi-
cers (AO), can take the same actions. As
explained in section I.D.12. of this Sum-
mary 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 Trea-
sury 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 involv-
ing one taxpayer and consider validity
issues in the absence of an unreviewable
court decision.
Three comments recommended
Appeals be allowed to consider the haz-
ards of litigation on a validity issue for
a notice or regulation based on a similar
or analogous court decision on a differ-
ent notice or regulation. The comments
mentioned Green Valley Investors v. Com-
missioner, 159 T.C. 5 (2022) (Tax Court
setting aside Notice 2017-10, 2017-4 IRB
544 for failure to comply with the Admin-
istrative Procedure Act’s (APA’s) notice
and comment requirements) as an exam-
ple and suggested that if a court decision
invalidated a notice for the same APA rea-
son 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 Excep-
tion 18, Exception 19, and Exception 20.
Appeals consideration is limited to unre-
viewable decisions involving the valid-
ity 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 Pro-
visions, 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 unre-
lated 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 judi-
cial decision in weighing the hazards of
a case. Similarly, another comment rec-
ommended 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 unre-
viewable decision rule in Exception 18,
Exception 19, and Exception 20. Until
the pending decision becomes unreview-
able by a Federal court, as described in
proposed §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 inde-
pendently interpreting Federal statutes
and a Federal court’s decision on the mer-
its 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 applicabil-
ity 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

Bulletin No. 2025–11 1075 March 10, 2025
based on a taxpayer’s argument that a
Treasury regulation is invalid unless there
is an unreviewable decision from a Fed-
eral 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 tax-
payer’s argument that a notice or revenue
procedure published in the Internal Reve-
nue 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 argu-
ments other than the validity of a regula-
tion, 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 circum-
stances.
The Treasury Department and the IRS
received several comments on Excep-
tion 19 and Exception 20. In response to
these comments, the Treasury Department
and the IRS have modified the language in
proposed §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 objec-
tion it made to Exception 18 that Excep-
tion 19 and Exception 20 improperly
restrict access to Appeals and forces tax-
payers to sacrifice legal arguments.
Like Exception 18, Exception 19 and
Exception 20 are consistent with the TFA,
which does not provide an absolute stat-
utory right to an administrative appeal,
and permits the Treasury Department and
the IRS to provide exceptions. The ratio-
nales 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 regu-
lations’ Explanation of Provisions. Ques-
tions regarding the validity of a regula-
tion, or the procedural validity of a notice
or revenue procedure, involve determina-
tions of general applicability resolved at
the highest levels of the Treasury Depart-
ment and the IRS and must be followed
by IRS employees, including AOs. Such
validity decisions also should be com-
municated and applied consistently to all
taxpayers. It therefore would be inappro-
priate for Appeals to act in contravention
with those institutional decisions in a spe-
cific case involving one taxpayer and con-
sider 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 reg-
ulation, or procedural validity of a notice
or revenue procedure, such as whether
the regulation, notice, or revenue proce-
dure applies to the taxpayer’s facts and
circumstances. They do not exclude the
validity challenges from Appeals consid-
eration totally but merely provide Appeals
will not be the first forum to hear these
challenges because it is not the appropri-
ate 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 pub-
lished 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 simi-
larly 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 haz-
ards 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-spe-
cific 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 pro-
cedurally valid involves a determination
regarding whether specific IRS subregula-
tory guidance complied with administra-
tive 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 reve-
nue procedure is a determination of gen-
eral 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 Excep-
tion 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 adminis-
trative law requirements should be com-
municated 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 can-
not be made available to other taxpayers.
An unreviewable decision makes infor-
mation accessible to all taxpayers and the
IRS regarding whether a notice or revenue
procedure was prescribed in accordance
with applicable Federal law. A determi-
nation by the judicial branch on the mer-
its of the validity challenge may reject
the determinations made by the Treasury

March 10, 2025 1076 Bulletin No. 2025–11
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 weigh-
ing 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 chal-
lenges to a regulation, notice, or rev-
enue procedure. A comment alleged
Appeals has historically analyzed legal
arguments concerning statutes, tax reg-
ulations, 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 qualifica-
tions to consider all hazards of litigation,
including challenges to the validity of reg-
ulations, notices, or revenue procedures,
or if they lack such training and qualifica-
tions, 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 valid-
ity 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’ train-
ing, skills, or competency. Appeals’ com-
petency does not pertain to the rationales
of Exception 19 and Exception 20 to pre-
vent a decision for one taxpayer regarding
guidance of general applicability, which
has been approved at the highest lev-
els within the Treasury Department and
the IRS. Also, like Appeals employees,
Chief Counsel attorneys handling dock-
eted cases in Tax Court must follow reg-
ulations, 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 consis-
tency because Appeals’ action, unlike an
unreviewable decision, is not public and is
applicable to only that taxpayer challeng-
ing the guidance. A final court decision is
applicable to, and accessible by, all tax-
payers and the IRS, which promotes con-
sistency. Furthermore, a final, unreview-
able 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 Cir-
cuit (Sixth Circuit) in Mann Construc-
tion 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 valid-
ity issue in a taxpayer’s case involving a
different notice. Similarly, another com-
ment 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 sim-
ilar comments regarding analogous court
decisions. See section I.D.11.a. of this
Summary of Comments and Explanation
of Revisions. If adopted, these recom-
mendations would defeat the purposes of
Exception 19 and Exception 20. More-
over, 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 unre-
lated notice or regulation is not a reason to
provide the suggested carve-out. Regard-
ing the transaction in the case cited by the
comment, for cases within the Sixth Cir-
cuit, 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 §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 amend-
ment to the statute upon which the regu-
lation is based, and a change in the statute
would have precedent over the regulation
for tax years after the change. These reg-
ulations 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 §301.7803-
2(c)(19) and (20). Also, for the sake of
clarity, Exception 19 is revised to define
the term invalid. See §301.7803-2(c)(19).
The same comment asked that if reg-
ulations overlap in a factual situation
whether reconciliation of such a situation
would involve a determination that a reg-
ulation is invalid. As proposed, Exception
19 would still allow Appeals to consider

Bulletin No. 2025–11 1077 March 10, 2025
whether the regulations apply to a taxpay-
er’s facts and circumstances, but to the
extent the taxpayer argues that the regu-
lations are invalid, Exception 19 would
preclude Appeals from considering that
validity issue in the absence of an unre-
viewable decision. The concern raised in
this comment appeared to relate to ensur-
ing 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 liti-
gating 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 regard-
ing Exception 20 if its intent is only that
Appeals would not be allowed to con-
sider whether a notice or revenue pro-
cedure was properly adopted or promul-
gated. As explained in section I.C.20. of
the proposed regulations’ Explanation of
Provisions, the term procedurally invalid
in proposed §301.7803-2(c)(20) was
intended to mean challenges to procedural
determinations regarding notices and rev-
enue procedures, including determina-
tions regarding compliance with admin-
istrative law requirements. This comment
recommended defining the term proce-
durally invalid for the sake of clarity. The
Treasury Department and the IRS adopt
this recommendation and have defined the
term to mean “any determination regard-
ing 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 §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 Excep-
tion 19 applies to Exception 20 because
whether a notice or revenue procedure is
procedurally valid is a determination of
general applicability resolved at the high-
est 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 Trea-
sury Department and the IRS. This com-
ment 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 valid-
ity of a Treasury regulation or procedural
validity of a notice or revenue procedure.
As stated in the text of Exception 19 and
Exception 20, such arguments include
whether the Treasury regulation, notice,
or revenue procedure applies to the tax-
payer’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 exclu-
sively determined by senior officials at
the Treasury Department and the IRS, the
final regulations do not adopt this com-
ment. 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 offi-
cials 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 pro-
posed 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 pro-
cess more inconsistent, random, and less
responsive to legal developments, caus-
ing additional costs and delay for taxpay-
ers who otherwise could access Appeals
while invalidity arguments work through
the court system. Another comment stated
that Appeals can reach a coordinated posi-
tion on validity challenges and forcing
taxpayers to litigate will decrease uni-
formity 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 judi-
cial decision deciding the validity chal-
lenge.
Sections I.C.18., 19., and 20. of the
proposed regulations’ Explanation of Pro-
visions, provides the Treasury Department
and the IRS’ position on consistency. Any
determinations with respect to constitu-
tional 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 tax-
payers, and the Treasury Department and
the IRS do not agree that Exception 19
and Exception 20 will result in bad pol-
icy. 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 ques-
tions of law. The Treasury Department
and the IRS recognize the deliberateness
of the judicial process, but absent that pro-
cess, 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 pro-
motes consistency and uniformity. Having
Appeals weigh hazards of litigation based
on an unreviewable decision that is pub-
licly available and generally applicable
to all taxpayers is sounder policy than a
confidential decision by Appeals on a mat-
ter that is applicable to only a single tax-
payer. The question of whether Appeals
can reach a coordinated position on valid-
ity 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 lev-
els of IRS published guidance on an unlim-
ited basis and including rationale from all
court opinions because this approach is
consistent with the Treasury Department’s
2019 Policy Statement on the Tax Regu-

March 10, 2025 1078 Bulletin No. 2025–11
latory Process (Policy Statement). Policy
Statement on the Tax Regulatory Process
(March 5, 2019), https://home.treasury.
gov/policy-issues/tax-policy/tax-regula-
tory-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 unifor-
mity. 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 con-
trary, 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 com-
prehensive strategy for customer service
and submit the plan to Congress. The
strategy will include best practices of cus-
tomer service provided in the private sec-
tor, including, online services, telephone
call back, and training of employees, and
the strategy must incorporate best prac-
tices 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 tax-
payer 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 argu-
ments, including validity challenges, does
not harm the Government but instead
provides the taxpayer and the Govern-
ment 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 taxpay-
er’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 lit-
igation. The comment argued that Trea-
sury 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 tax-
payer’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 prom-
ulgation of a regulation, or publication
of a notice or revenue procedure goes
through multiple levels of review within
the Treasury Department and the IRS. An
individual AO does not have the author-
ity to unilaterally contradict the decisions
made through the regulatory or subregu-
latory process. Furthermore, as explained
above and in section I.C.20. of the pro-
posed regulations’ Explanation of Provi-
sions, the validity of a regulation or the
procedural validity of a notice of revenue
procedure does not involve taxpayer-spe-
cific 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 Sum-
mary 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 §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 guid-
ance 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 deci-
sion of the court.
A comment proposed that Chief Coun-
sel 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 pro-
posed regulations’ Explanation of Provi-
sions, cases are designated for litigation
or withheld in the interest of sound tax
administration to establish judicial prec-
edent, 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 exclu-
sion also is set forth in Exception 22, see
§301.7803-2(c)(22), and prevents dupli-
cative review by Appeals.
Two comments stated that Exception
21 provides too much deference to Chief
Counsel and recommended that the excep-
tion delete the reference to withheld cases.
The Treasury Department and the IRS
do not adopt these comments. The with-
holding of cases or issues from Appeals
has been, and will continue to be, limited

Bulletin No. 2025–11 1079 March 10, 2025
and rare.
1
The determination to withhold
a case or issue from Appeals requires a
high-level review, with the decision ulti-
mately 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 consid-
eration on the basis of a referral not being
in the interest of sound tax administration
under Rev. Proc. 2016-22. Congress rec-
ognized that the Treasury Department and
the IRS retain their historical discretion to
determine whether the resolution of par-
ticular 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, Excep-
tion 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.
Two comments that objected to Excep-
tion 19 and Exception 20, in the alter-
native, recommended the regulations
provide notice and protest rules for any
taxpayer with a case or issue withheld or
designated for litigation. One of the com-
ments 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 expla-
nation and given an opportunity to object.
The Treasury Department and the
IRS do not adopt these comments. If
Chief Counsel determines that a dock-
eted 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 Excep-
tion 21 and meet the requirements of pro-
posed §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 sec-
tion 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 taxpay-
ers would similarly receive an explanation
and opportunity to protest under proposed
§301.7803-3 after they receive a notice of
deficiency.
Another comment alleged that the des-
ignation of cases or issues for litigation is
not rare and prevents sound tax administra-
tion in thousands of cases because Appeals
could arrive at the correct amount of tax or
a deduction and the IRS’s approach of set-
tling 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 tax-
payers 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.
14. Appeals Consideration is a
Prerequisite to Jurisdiction of the Tax
Court: Exception 23
One comment was received on Excep-
tion 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 pre-
requisite 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 indi-
cate that Exception 23 does not apply
when there is an exception to the require-
ment 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 jurisdic-
tion.
E. Procedural and Timing
Requirements are Followed: Proposed
§301.7803-2(e)
One comment was received on pro-
posed §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
§301.7803-2(e) provides that a request
for Appeals consideration must be sub-
mitted in the time and manner prescribed
in applicable forms, instructions, or other
administrative guidance and that all pro-
cedural 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 under-
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.

March 10, 2025 1080 Bulletin No. 2025–11
stand 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 com-
ment 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 lan-
guage on the first page of a notice that has
an appeal right; the IRS should have an
easy-to-understand fill-in form that con-
tains 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 cer-
tified 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 smart-
phone and be available in multiple lan-
guages, and the taxpayer should be able to
submit this form online to meet the dead-
line for the Appeals request.
The Treasury Department and the
IRS do not adopt this comment’s rec-
ommendations 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 effi-
ciency, including in accessing Appeals,
are important topics that the IRS will con-
tinue to look at as it improves and devel-
ops 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 §301.7803-2(f)
One comment was received with a
suggestion relating to the general rule of
one opportunity for Appeals consideration
in proposed §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 Sum-
mary of Comments and Explanation of
Revisions.
1. In general. Proposed §301.7803-2(f)
(1)
Proposed §301.7803-2(f)(1) provides
that if a Federal tax controversy is eligi-
ble 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 pro-
posed §301.7803-2(f)(1) recommended
that the final regulations should explicitly
include the situation in which the tax-
payer 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 con-
sider 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 sub-
ject to an exception described in the final
regulations. An example has been added
to §301.7803-2(e) to illustrate this point,
which is a more appropriate place in the
regulations for this addition.
2. Exceptions. Proposed §301.7803-2(f)
(1) and (2)
There are several exceptions to the
general rule in proposed §301.7803-2(f)
(1). Proposed §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 §301.7803-
2(f)(2) provides an exception for a tax-
payer that participated in an Appeals
early consideration program but did not
reach an agreement with Appeals. Pro-
posed §301.7803-2(f)(2) also provides an
exception to the general rule in proposed
§301.7803-2(f)(1) for taxpayers who pro-
vide new information to the IRS and who
meet the conditions and requirements for
audit reconsideration or for reconsider-
ation of liability issues previously consid-
ered by Appeals. Appeals may consider
the new information.
A comment recommended clarifying
in proposed §301.7803-2(f)(2) that a new
development in the law is “new informa-
tion” that would allow Appeals reconsid-
eration 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 exam-
ination. It is not intended to mean a new
development in the law. Additional lan-
guage has been added to §301.7803-2(f)
(2) in the final regulations to clarify the
intended meaning.
G. Special Rules. Proposed §301.7803-
2(g)
A comment suggested that Chief Coun-
sel 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 §301.7803-2(g), Chief Counsel
may delay forwarding a docketed case
to Appeals when Chief Counsel antici-
pates 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 Coun-
sel 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 pro-
motes the efficient disposition of a taxpay-
er’s case, including developing or narrow-
ing the issues in dispute. The taxpayer will
continue to be eligible for consideration
by Appeals if the litigation continues and
all other requirements in §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
§301.7803-2(c) does not include certain

Bulletin No. 2025–11 1081 March 10, 2025
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 com-
ments on whether these items should be
included in the list of exclusions. Spe-
cifically, 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 final-
ized 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 Explana-
tion 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 reg-
ulations that apply to other types of letter
rulings. In particular, a letter ruling inter-
prets 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 rea-
sons and added language to clarify this
point that Exception 17 includes Associate
Office decisions on 9100 relief requests
and CAM requests. See §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
§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 con-
trary to the letter ruling and that position
is examined by the IRS, Appeals can con-
sider that Federal tax controversy if all
other requirements in §301.7803-2 are
met.
The comment also recommended a
separate exclusion for Appeals consider-
ation of decisions by an Associate Office
regarding 9100 relief or CAM requests.
The Treasury Department and the IRS do
not adopt this recommendation. As previ-
ously 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 deci-
sion in the dispute if all other requirements
in §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 pro-
tect taxpayer rights. Two comments sug-
gested the final regulations should allow
Appeals to consider such cases because
judicial review is costly and time con-
suming and Appeals consideration would
reduce litigation. The Treasury Depart-
ment 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 pro-
vision 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 Trea-
sury Department and the IRS disagree
with this reasoning because, as explained
previously in this Summary of Comments
and Explanation of Revisions, impartial-
ity 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 haz-
ards of litigation while impartially consid-
ering 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 com-
ment, Appeals should review accounting
method issues consistently regardless
of whether the originating function was
through an IRS examination or an Asso-
ciate 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 counterpro-
ductive to tax administration. The Trea-
sury Department and the IRS agree that
Appeals should have the ability to review
accounting method issues arising in an
examination, even when the account-
ing 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 appli-
cation of laws and public confidence in the
IRS. Appeals consideration of an Asso-
ciate Office’s decisions regarding 9100
relief or CAM requests would promote
public confidence in the IRS and is con-
sistent with the purpose of the TFA.
A comment asserted the ultimate deci-
sion may be binary, in that an Associate
Office either does or does not permit 9100
relief or a CAM. According to this com-
ment, 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

March 10, 2025 1082 Bulletin No. 2025–11
is viewed as a binary decision, the Trea-
sury 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 deci-
sion and a Federal tax controversy arises
that involves the subject of the adverse
decision, Appeals may consider the sub-
ject of that Associate Office’s decision
in the dispute if all other requirements in
§301.7803-2 are met.
The IRM currently provides that
Appeals will not partially or fully con-
cede 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 con-
cessions if it determines there is a signif-
icant 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 substan-
tive 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 dead-
lines. The comment urged the Treasury
Department and the IRS to look through
the superficial similarities of these deni-
als 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, reg-
ulations, or other guidance published in
the Internal Revenue Bulletin. A decision
to deny such a request, whether on a pro-
cedural or a substantive basis, is based
on all the facts and circumstances. The
final regulations do not provide a stan-
dard of review because it is outside the
scope of these regulations, and the Trea-
sury 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 tax-
payers 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 diffi-
cult 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 author-
ity 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 taxpay-
er’s Federal income tax return.
I. Miscellaneous Recommendations
Regarding Proposed §301.7803-2
A comment expressed concern that
the proposed regulations could make the
Appeals review process more confus-
ing and stressful for taxpayers, including
low-income taxpayers, but did not specify
how or why this could happen. The Trea-
sury Department and the IRS disagree with
this comment. The procedural require-
ments, timing requirements, and almost
all of the exceptions to consideration by
Appeals already exist in previously estab-
lished guidance regarding Appeals. As in
the past, the proposed exceptions are lim-
ited in number and the vast majority of
taxpayers, including low-income taxpay-
ers, would have the opportunity to have
Appeals consider their Federal tax contro-
versies.
The same comment suggested con-
sidering 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 pro-
posed regulations overlap with §601.106.
To the extent that the Treasury Department
and the IRS are not repealing or revising
§601.106, the comment recommended
Treasury explicitly harmonize areas of
overlap and consolidate all Appeals regu-
lations into adjacent sections of the regu-
lations to prevent ambiguity and contro-
versy. In the alternative, even if no actual
or perceived conflict exists, the comment
recommended adding cross-references in
§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 State-
ment of Procedural Rules, 26 CFR part
601, are procedural rules governing inter-
nal IRS affairs. Those rules do not concern
the substantive resolution of Federal tax
controversies by Appeals.
Two comments recommended addi-
tional 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 opera-
tional 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 Excep-
tion 19 and Exception 20 effective even
though, as proposed in the proposed reg-
ulations, 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 recom-
mendation 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.

Bulletin No. 2025–11 1083 March 10, 2025
II. Notice and Protest of Denial
Procedures Following Issuance of
a Notice of Deficiency: Proposed
§301.7803-3
Two comments were received on pro-
posed §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 requirements of proposed §301.7803-
3(a)(1) through (5). Proposed §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 Depart-
ment and the IRS do not adopt this rec-
ommendation 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 §301.7803-3 in the absence of a
notice of deficiency.
A comment described the notice
and protest procedures in proposed
§301.7803-3 as not applying when a
taxpayer is ineligible for Appeals con-
sideration because one of the exceptions
listed in proposed §301.7803-2(c) applies
to the taxpayer. This description is incor-
rect. As written and intended, proposed
§301.7803-3 does not except such cases
or issues from the notice and protest pro-
cedures. Thus, that one of the exceptions
listed in proposed §301.7803-2(c) applies
to a taxpayer does not prevent these proce-
dures from applying if the taxpayer other-
wise meets the requirements of proposed
§301.7803-3(a)(1) through (5), although it
may be a reason why the request for refer-
ral to Appeals was denied. In response to
the comments, the final regulations make
clarifying edits to the text of §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 con-
cerned topics and issues that are outside
the scope of these final regulations.
One such comment recommended that
these final regulations include the assur-
ances currently provided in subregulatory
guidance regarding the ex parte rules; lim-
itations on the IRS examination function
or Appeals raising new issues; confer-
ence rights; or the longstanding policies
regarding the reopening of mutual con-
cession cases. A comment was offered on
access to administrative files under new
section 7803(e)(7). Another comment
recommended that the Treasury Depart-
ment 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 recom-
mended that neither Appeals nor any IRS
personnel involved in the Appeals confer-
ence 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 sec-
tions 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 com-
ments 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 Regula-
tions 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 con-
troversy 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 enti-
ties. 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 consider-
ation. 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 regard-
ing certain circumstances in which a writ-
ten explanation will be provided regard-
ing why Appeals consideration was not
provided. None of the regulations affect
entities’ substantive tax liability nor do
they affect the process that Appeals fol-
lows when it considers an eligible Federal
tax controversy. Any significant economic
impact on small entities will result from
the application of the substantive tax provi-
sions 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.

March 10, 2025 1084 Bulletin No. 2025–11
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 expen-
ditures 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 local gov-
ernments, 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 Exec-
utive 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 des-
ignated 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 Cumula-
tive Bulletin) and are available from the
Superintendent of Documents, U.S. Gov-
ernment Publishing Office, Washington,
DC 20402, or by visiting the IRS website
at https://www.irs.gov.
Drafting Information
The principal author of these regula-
tions 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
Paragraph 1. The authority citation
for part 301 is amended by adding entries
in numerical order for §§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).
* * * * *
Par. 2. Sections 301.7803-2 and
301.7803-3 are added to read as follows:
§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 Fed-
eral tax controversies without litigation on
a basis that is fair and impartial to both the
Government and the taxpayer, promotes
a consistent application and interpreta-
tion 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 con-
troversy by Appeals—(1) In general. The
Appeals resolution process is generally
available to all taxpayers to resolve Fed-
eral tax controversies.
(2) Definition of Federal tax contro-
versy. For purposes of this section, a Fed-
eral 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 addi-
tion to tax under the internal revenue laws.
For purposes of this section, a Federal tax
controversy includes, for example, a dis-
pute 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 foun-
dation, or qualified employee plan under
the internal revenue laws, or the status of a
tax-exempt or other tax-advantaged bond.
(3) Other administrative determina-
tions treated as Federal tax controversies.
Notwithstanding the definition of a Fed-
eral tax controversy in paragraph (b)(2)
of this section, disputes over administra-
tive 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 adminis-
tered by the IRS that are outside the Inter-
nal Revenue Code (Code), such as a liabil-
ity 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);

Bulletin No. 2025–11 1085 March 10, 2025
(iii) Application to become, or the
sanction of, an Electronic Return Origina-
tor 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 pro-
visions 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 con-
sideration by Appeals or matters or issues
that are otherwise ineligible for consider-
ation 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 eligi-
ble for consideration by Appeals, the inel-
igible matter or issue will not be consid-
ered 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 pen-
alty 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. Appeals
also may consider a non-frivolous sub-
stantive 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 whistleblow-
ers).
(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 con-
cerning material to be deleted from the
text of a written determination pursuant to
section 6110 of the Code (relating to pub-
lic inspection of written determinations)
unless the written determination is other-
wise being considered by Appeals.
(7) Any denial of access under the Pri-
vacy 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 errone-
ously returns or rejects an offer in compro-
mise (OIC) submitted under section 7122
of the Code (relating to compromises) as
nonprocessable or no longer processable
and the taxpayer requests Appeals con-
sideration to assert that the OIC should
be deemed to be accepted under section
7122(f).
(10) Any case in which a criminal pros-
ecution, or a recommendation for crim-
inal 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 Jus-
tice, 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 delin-
quent 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 delin-
quencies).
(13) Any issue barred from consider-
ation under section 6320 or section 6330,
§§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 resolu-
tion 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 Commission-
er’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-ex-
empt status, an entity’s classification as a

March 10, 2025 1086 Bulletin No. 2025–11
foundation, the initial or continuing deter-
mination of employee plan qualification,
or a determination involving an obliga-
tion 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 quali-
fication, or determination involving an
obligation and the issuer of an obligation
under section 103 is based upon a tech-
nical 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 let-
ter is based upon a technical advice mem-
orandum 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 Asso-
ciate Chief Counsel regarding whether to
issue a letter ruling or the content of a let-
ter ruling. This includes decisions regard-
ing requests for relief under §§301.9100-1
through 301.9100-22 and requests for
a change in method of accounting. The
subject of the letter ruling may be consid-
ered 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 tak-
ing 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 taxpay-
er’s argument that a statute violates the
United States Constitution unless there
is an unreviewable decision from a Fed-
eral court holding that the cited statute
is unconstitutional. For purposes of this
paragraph (c)(18), an argument that a
statute violates the United States Con-
stitution 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 argu-
ments other than the constitutionality
of a statute, such as whether the statute
applies to the taxpayer’s facts and cir-
cumstances. 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 chal-
lenging. 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 tax-
payer’s facts and circumstances. For pur-
poses of this paragraph (c)(19), the term
invalid means any challenge to validity,
whether substantively invalid or proce-
durally 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 proce-
dure 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 proce-
dural validity of a notice or revenue pro-
cedure, such as whether the notice or rev-
enue 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 con-
sideration in a Tax Court case, in accor-
dance with guidance regarding designat-
ing or withholding a case or issue. For
purposes of this section, designated for
litigation means that the Federal tax con-
troversy, 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 judg-
ment request under section 7428 (relating
to declaratory judgment on the classifica-
tion 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 Cer-
tified Professional Employer Organization
certification.
(d) Originating office has completed
its review—(1) In general. Appeals con-
sideration of a matter or issue is appropri-
ate only after the originating IRS office
has completed its action on the Federal
tax controversy and issued an administra-
tive determination or a proposed admin-
istrative determination accompanied by
an offer for consideration by Appeals. If
the originating office has not completed
its action regarding the Federal tax con-
troversy, the request for Appeals consider-
ation is premature. Appeals may consider
the Federal tax controversy if the taxpayer
requests consideration after the originat-
ing 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 con-
troversy under the terms of that adminis-
trative guidance, such as mediation under

Bulletin No. 2025–11 1087 March 10, 2025
a fast track settlement program or early
consideration of some issues under an
early referral program.
(e) Procedural and timing require-
ments are followed—(1) In general. A
request for Appeals consideration of a
Federal tax controversy must be submit-
ted 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 Fed-
eral tax controversy. In addition, there
must be sufficient time remaining on
the appropriate limitations period for
Appeals to consider the Federal tax con-
troversy, 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 limita-
tions 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 assess-
ment 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 run-
ning of the assessment period while a tax-
payer 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 con-
sider the case.
(f) One opportunity for consideration
by Appeals—(1) In general. If a Federal
tax controversy is eligible for consider-
ation by Appeals and the procedural and
timing requirements are followed, a tax-
payer 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 settle-
ment 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 contro-
versy if the taxpayer notified the Office
of Chief Counsel or the IRS that the tax-
payer 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 cur-
rently before the Tax Court.
(2) Exceptions. Notwithstanding
paragraph (f)(1) of this section, tax-
payers 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 origi-
nating 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 previously considered by Appeals
may have an opportunity for Appeals
consideration, as provided in adminis-
trative guidance.
(g) Special rules. The following special
rules apply to this section:
(1) Appeals reconsideration. Notwith-
standing 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 Coun-
sel return the case to Appeals for full con-
sideration 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.
§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 lim-
itation 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 pro-
vides 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 pro-
testing the decision to deny the request,
but only if the requirements of para-
graphs (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 tax-
payer 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 posi-
tions).
(3) Multiple requests for referral to
Appeals. The taxpayer has not previously
requested consideration by Appeals, pur-

March 10, 2025 1088 Bulletin No. 2025–11
suant 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
§301.7803-2(f)(2) with respect to a tax-
payer participating in an early consider-
ation program.
(5) Notice of deficiency with more than
one matter or issue. If the notice of defi-
ciency 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 consid-
eration by Appeals made on or after Feb-
ruary 14, 2025.
Douglas W. O’Donnell,
Deputy Commissioner.
Approved: January 3, 2025.
Aviva R. Aron-Dine,
Deputy Assistant Secretary of the
Treasury (Tax Policy).
(Filed by the Office of the Federal Register January
14, 2025, 8:45 a.m., and published in the issue of the
Federal Register for January 15, 2025, 90 FR 3645)

Bulletin No. 2025–11 1089 March 10, 2025
Part III
Guidance Related to
Health Coverage Reporting
Required by Sections 6055
and 6056
Notice 2025-15
PURPOSE
This notice provides guidance regard-
ing the alternative manner of furnishing
certain health insurance coverage state-
ments to individuals pursuant to sec-
tions 6055(c)(3) and 6056(c)(3) of the
Internal Revenue Code (Code), added by
section 2 of the Paperwork Burden Reduc-
tion Act (Pub. L. 118-167, 138 Stat. 2584,
Dec. 23, 2024) (the Act).
1
Sections 6055(c)
(3) and 6056(c)(3) of the Code are effec-
tive for statements with respect to returns
required by sections 6055 and 6056 for
calendar years after 2023.
BACKGROUND
Section 6055 of the Code requires all
persons providing minimum essential
coverage to an individual during a calen-
dar year to file annual information returns
with the Internal Revenue Service (IRS)
reporting certain information, including
information that identifies each covered
individual and the individual’s months of
coverage.
2
Section 6055 also requires per-
sons providing minimum essential cov-
erage to an individual during a calendar
year to furnish each responsible individual
(generally, the person named on an appli-
cation who enrolls one or more individu-
als in minimum essential coverage) with a
statement containing the same information
that is included on the annual information
return required to be filed with the IRS.
See Treas. Reg. § 1.6055–1(b)(11). Pur-
suant to section 6055(c)(2), the statement
must be furnished on or before January 31
of the year following the calendar year for
which the return was required to be made.
Treasury Regulation § 1.6055-1(g)(4) pro-
vides an automatic 30-day extension of
time in which to furnish these statements.
Treasury Regulation § 1.6055-1(g)(4)
(ii)(B) provides an alternative manner of
furnishing the statements required under
section 6055(c) of the Code if the individ-
ual shared responsibility payment amount
under section 5000A(c) for the calendar
year in which minimum essential cover-
age is provided is zero. Pursuant to Treas.
Reg. § 1.6055-1(g)(4)(ii)(B), the require-
ment to furnish the statement generally is
satisfied if the reporting entity provides
clear and conspicuous notice, in a location
on its website that is reasonably accessi-
ble to all responsible individuals, stating
that responsible individuals may receive a
copy of their statement upon request. The
notice must be timely posted and retained
on the website through October 15 of the
year following the calendar year to which
the statement relates. The regulations
further provide that the reporting entity
must furnish the statement to a requesting
responsible individual within 30 days of
the date the request is received.
Section 6056 requires applicable large
employers (ALEs) (generally those with
50 or more full-time employees, includ-
ing full-time equivalent employees, in the
previous year) to file annual information
returns with the IRS relating to the health
insurance, if any, that the ALE offers its
full-time employees.
3
Section 6056 also
requires each ALE to furnish to each full-
time employee a statement containing
the same information that is included in
the annual information return required
to be filed with the IRS. Pursuant to sec-
tion 6056(c)(2), the statement must be fur-
nished on or before January 31 of the year
following the calendar year for which the
return was required to be made. Treasury
Regulation § 301.6056-1(g)(1) provides
an automatic 30-day extension of time in
which to furnish these statements.
Section 2 of the Act adds sec-
tions 6055(c)(3) and 6056(c)(3) to the
Code, effective for statements with respect
to returns required by sections 6055 and
6056 for calendar years after 2023. These
provisions provide that a person required
to make a return under section 6055(a)
or section 6056(a) shall be treated as
timely furnishing the written statements
required under section 6055(c)(1) or sec-
tion 6056(c)(1) if the person provides
clear, conspicuous, and accessible notice
(at such time and in such manner as the
Secretary of the Treasury may provide)
that any individual to whom a statement
would otherwise be required to be fur-
nished may request a copy of such state-
ment and the copy is timely furnished.
For this purpose, the statement is timely
furnished if furnished to such individual
not later than the later of January 31 of the
year following the calendar year for which
the return was required to be made or 30
days after the date of the request.
GUIDANCE
Section 6055
A person providing minimum essen-
tial coverage who is required to furnish a
statement under section 6055 may satisfy
the alternative manner of furnishing the
statement provided under section 6055(c)
by complying with the requirements of
Treas. Reg. § 1.6055-1(g)(4)(ii)(B)(1)-(3),
but without regard to whether the individ-
ual shared responsibility payment amount
under section 5000A(c) for the calendar
year in which minimum essential cover-
age is provided is zero. The person pro-
viding minimum essential coverage must
post the notice described in Treas. Reg.
§ 1.6055-1(g)(4)(ii)(B)(1)-(3) by the due
date for furnishing the statement, includ-
ing the automatic 30-day extension. For
example, for 2024 statements, the person
providing minimum essential coverage
must post the notice by March 3, 2025.
A requested statement is timely fur-
nished to an individual if furnished not
1
As of the date of this notice, sections 6055 and 6056 both contain two subparagraphs numbered (c)(3), due to an apparent numbering error. In this notice, references to sections 6055(c)(3)
and 6056(c)(3) should be understood as references to the subparagraphs titled “alternative manner of furnishing statements.”
2
Information returns under section 6055 generally are filed using Form 1095-B, Health Coverage.
3
Information returns under section 6056 generally are filed using Form 1095-C, Employer-Provided Health Insurance Offer and Coverage.

March 10, 2025 1090 Bulletin No. 2025–11
later than the later of January 31 of the
year following the calendar year for which
the return was required to be made or 30
days after the date of the request. A person
providing minimum essential coverage
may furnish the statement electronically
pursuant to Treas. Reg. § 1.6055-2.
Section 6056
An ALE required to furnish a state-
ment under section 6056 may satisfy the
alternative manner of furnishing the state-
ment provided under section 6056(c)(3)
by complying with the requirements of
Treas. Reg. § 1.6055-1(g)(4)(ii)(B)(1)-(3),
but without regard to whether the individ-
ual shared responsibility payment amount
under section 5000A(c) for the calendar
year in which minimum essential coverage
is provided is zero and by substituting the
term “full-time employee” for “responsi-
ble individual” and the term “Form 1095-
C, Employer-Provided Health Insurance
Offer and Coverage” for “Form 1095-B,
Health Coverage.” The ALE must post the
notice described in Treas. Reg. § 1.6055-
1(g)(4)(ii)(B)(1)-(3) (with the relevant
substitutions) by the due date for furnish-
ing the statement, including the automatic
30-day extension. For example, for 2024
statements, the ALE must post the notice
by March 3, 2025.
A requested statement is timely fur-
nished to an individual if furnished not
later than the later of January 31 of the
year following the calendar year for which
the return was required to be made or 30
days after the date of the request. An ALE
may furnish the statement electronically
pursuant to Treas. Reg. § 301.6056-2.
EFFECTIVE DATE
This notice is effective for statements
required by section 6055 or section 6056
with respect to returns for calendar years
after 2023.
DRAFTING INFORMATION
The principal authors of this notice are
the Office of the Associate Chief Coun-
sel (Employee Benefits, Exempt Organi-
zations, and Employment Taxes) and the
Office of the Associate Chief Counsel
(Income Tax & Accounting), though other
Department of the Treasury and IRS offi-
cials participated in its development. For
further information on the provisions of
this notice, contact (202) 317-7006 (not a
toll-free number) for information related
to section 6055 of the Code, and (202)
317-5500 (not a toll-free number) for
information related to section 6056 of the
Code.
26 CFR 601.601: Rules and regulations.
(Also: Part I, §§ 832, 846; 1.832-4, 1.846-1.)
Rev. Proc. 2025-15
SECTION 1. PURPOSE
This revenue procedure provides dis-
count factors for the 2024 accident year
for use by insurance companies in com-
puting discounted unpaid losses under
§ 846 of the Internal Revenue Code
1
and
discounted estimated salvage recoverable
under § 832. This revenue procedure also
provides, for convenience, discount fac-
tors for losses incurred in the 2023 acci-
dent year and earlier accident years for use
in taxable years beginning in 2024. The
discount factors for accident years before
2024 were provided in earlier revenue
procedures. See, e.g., Rev. Proc. 2023-41,
2023-52 I.R.B. 1609. See Rev. Proc. 2023-
10, 2023-3 I.R.B. 411, for background
concerning the loss payment patterns and
application of the discount factors. This
revenue procedure also requests com-
ments relating to the composite method
described in this revenue procedure and a
2024 change by the National Association
of Insurance Commissioners (NAIC) to
Schedule P (Analysis of Losses and Loss
Expenses) of the annual statement.
SECTION 2. SCOPE
This revenue procedure applies to any
insurance company that is required to
discount unpaid losses under § 846 for a
line of business using the discount factors
published by the Secretary of the Treasury
or the Secretary’s delegate (Secretary) and
also applies to any insurance company that
is required to discount estimated salvage
recoverable under § 832.
SECTION 3. DISCOUNT FACTORS
FOR THE 2024 ACCIDENT YEAR
.01 The tables in this section 3 pres-
ent separately for each line of business
the discount factors for losses incurred in
the 2024 accident year for use by insur-
ance companies in computing discounted
unpaid losses under § 846 and estimated
salvage recoverable under § 832. The dis-
count factors presented in this section are
generally determined by using the applica-
ble interest rate for 2024 under § 846(c),
which is 3.18 percent, compounded semi-
annually. The exceptions are the discount
factors for long-tail lines of business
determined using the composite method
described in section V of Notice 88-100,
1988-2 C.B. 439. See section 3.02 of this
revenue procedure. All discount factors are
determined by assuming all loss payments
occur in the middle of the calendar year.
.02 Section V of Notice 88-100 sets
forth a composite method for computing
discounted unpaid losses for accident
years that are not separately reported on
the annual statement. Tables 1 and 2 sep-
arately provide discount factors for insur-
ance companies that have elected to use
the composite method of Notice 88-100.
See Rev. Proc. 2002-74, 2002-2 C.B. 980.
The discount factors computed using the
composite method are unrelated to the
composite discount factors referred to in
§ 1.846-1(b)(1)(ii) and (4), which apply
to lines of business for which the Secre-
tary has not published discount factors.
The composite discount factors for use
with respect to such lines of business are
labelled “Short-Tail Composite” (in Table
1, part B) and “Long-Tail Composite”
(in Table 2, part B). The “Miscellaneous
Casualty” discount factors referenced in
§ 1.846-1(b)(2) are not set forth in tables
but are equivalent to the “Short-Tail Com-
posite” discount factors.
1
Unless otherwise specified, all “section” or “§” references are to sections of the Internal Revenue Code or the Income Tax Regulations (26 CFR part 1).

Bulletin No. 2025–11 1091 March 10, 2025
Discount Factors for 2024
2024 Interest Rate (using semi-annual compounding): 3.18%
Table 1 (part A)
Discount Factors Under Section 846 (percent)
For Losses Incurred in Accident Year 2024 in Short-Tail Lines of Business
Taxable Year
Beginning in
Auto Physical
DamageFidelity/Surety
Financial Guaranty/
Mortgage GuarantyInternationalOther*
2024 98.2294 95.3527 94.8106 95.5017 96.7165
2025 96.9063 96.9063 96.9063 96.9063 96.9063
Taxpayer Not Using Composite Method
Years after 2025 98.4349 98.4349 98.4349 98.4349 98.4349
Taxpayer Using the Composite Method
2026 98.4349 98.4349 98.4349 98.4349 98.4349
Years after 2026
Use composite method discount factors published for the accident year that is two years prior to the
specified taxable year.
* For the Accident and Health line of business (other than disability income or credit disability insurance), the discount
factor for taxable year 2024 is 98.4349 percent. This is also the discount factor used in later taxable years for taxpayers
not using the composite method. For taxpayers using the composite method, the discount factor for losses incurred in
2024 is the discount factor published for Accident and Health lines of business for losses incurred in the accident year
coinciding with the taxable year.

March 10, 2025 1092 Bulletin No. 2025–11
Table 1 (part B)
Discount Factors Under Section 846 (percent)
For Losses Incurred in Accident Year 2024 in Short-Tail Lines of Business
Taxable Year
Beginning in
Reinsurance -
Nonproportional
Assumed
Financial Lines
Reinsurance -
Nonproportional
Assumed
Liability
Reinsurance -
Nonproportional
Assumed
Property
Special Property
(Fire,
Allied Lines,
Inland Marine,
Earthquake,
Burglary & Theft)Warranty
Short-Tail
Composite
2024 95.4724 94.4556 95.8586 97.3675 98.2204 96.9644
2025 96.9063 96.9063 96.9063 96.9063 96.9063 96.9063
Taxpayer Not Using Composite Method
Years after 2025 98.4349 98.4349 98.4349 98.4349 98.4349 98.4349
Taxpayer Using the Composite Method
2026 98.4349 98.4349 98.4349 98.4349 98.4349 98.4349
Years after 2026
Use composite method discount factors published for the accident year that is two years prior to the
specified taxable year.

Bulletin No. 2025–11 1093 March 10, 2025
Table 2 (part A)
Discount Factors Under Section 846 (percent)
For Losses Incurred in Accident Year 2024 in Long-Tail Lines of Business
Taxable Year
Beginning in
Commercial
Auto/Truck
Liability/Medical
Medical
Professional
Liability -
Claims-Made
Medical
Professional
Liability -
Occurrence
Multiple
Peril Lines
Other
Liability -
Claims-Made
Other
Liability -
Occurrence
2024 93.5297 90.9642 85.7501 95.0266 90.6679 89.1463
2025 94.1807 92.1360 87.8094 93.3234 91.6872 90.0762
2026 94.7825 92.4837 89.3161 93.3592 91.7326 90.8391
2027 95.1149 93.4135 90.8021 93.2872 91.9561 91.2159
2028 95.0077 93.2265 91.6724 93.0521 91.8814 91.5431
2029 94.4985 93.9140 92.0908 93.3279 91.9254 90.4397
2030 94.5195 93.4466 92.5061 93.4114 91.5352 90.4147
2031 95.0319 94.3864 92.3540 95.3151 93.3566 91.2169
2032 96.0761 95.8189 94.3192 96.2136 96.0795 92.2913
2033 98.0909 97.4088 96.1397 97.7808 96.7172 94.2707
Taxpayer Not Using Composite Method
2034 98.4349 98.4349 97.5433 98.4349 98.1879 95.7140
2035 98.4349 98.4349 98.4349 98.4349 98.4349 97.1521
Years after 2035 98.4349 98.4349 98.4349 98.4349 98.4349 98.4349
Taxpayer Using the Composite Method
2034 98.4349 98.4349 97.7753 98.4349 98.2165 96.6902
Years after 2034
Use composite method discount factors published for the accident year that is ten years prior to the
specified taxable year.

March 10, 2025 1094 Bulletin No. 2025–11
Table 2 (part B)
Discount Factors Under Section 846 (percent)
For Losses Incurred in Accident Year 2024 in Long-Tail Lines of Business
Taxable
Year Beginning in
Private
Passenger
Auto Liability/
Medical
Products
Liability -
Claims-Made
Products
Liability -
Occurrence
Workers'
Compensation
Long-Tail
Composite
2024 95.4774 88.2374 87.5362 88.0319 92.8228
2025 95.1115 89.6632 89.0194 86.4322 92.0595
2026 95.2005 89.9220 90.2196 85.7969 91.7990
2027 95.1136 88.8949 90.8424 85.2788 91.1056
2028 94.1424 90.5036 91.1923 85.5894 90.7820
2029 93.4703 92.2243 91.6975 84.9266 90.2776
2030 94.0845 94.1006 92.6920 85.5556 90.5337
2031 94.2401 94.5726 93.0041 87.1549 91.9386
2032 95.0499 95.9293 94.1108 88.6763 93.3939
2033 97.3891 97.7393 96.2921 89.6659 94.7828
Taxpayer Not Using Composite Method
2034 98.4349 98.4349 97.6992 91.0410 96.2231
2035 98.4349 98.4349 98.4349 92.4444 97.6275
2036 98.4349 98.4349 98.4349 93.8763 98.4349
2037 98.4349 98.4349 98.4349 95.3366 98.4349
2038 98.4349 98.4349 98.4349 96.8232 98.4349
2039 98.4349 98.4349 98.4349 98.3237 98.4349
Years after 2039 98.4349 98.4349 98.4349 98.4349 98.4349
Taxpayer Using the Composite Method
2034 98.4349 97.5990 97.8683 93.2948 97.2397
Years after 2034
Use composite method discount factors published for the accident year that is ten years prior to the
specified taxable year.

Bulletin No. 2025–11 1095 March 10, 2025
SECTION 4. DISCOUNT FACTORS
FOR TAXABLE YEARS BEGINNING
IN 2024
.01 The tables in this section 4 pres-
ent separately for each line of business
discount factors for losses incurred in the
2024 accident year and earlier accident
years for use by insurance companies in
computing discounted unpaid losses under
§ 846 and estimated salvage recoverable
under § 832 in taxable years beginning in
2024.
.02 Tables 3 and 4 separately provide
discount factors for insurance compa-
nies that have elected to use the compos-
ite method of Notice 88-100. See Rev.
Proc. 2002-74. The discount factors
computed using the composite method
are unrelated to the composite discount
factors referred to in § 1.846-1(b)(1)(ii)
and (4), which apply to lines of business
for which the Secretary has not pub-
lished discount factors. The composite
discount factors for use with respect
to such lines of business are labelled
“Short-Tail Composite” (in Table 3,
part B) and “Long-Tail Composite” (in
Table 4, part B). The “Miscellaneous
Casualty” discount factors referenced
in § 1.846-1(b)(2) are not set forth in
tables but are equivalent to the “Short-
Tail Composite” discount factors.

March 10, 2025 1096 Bulletin No. 2025–11
Table 3 (part A)
Discount Factors Under Section 846 (percent)
For Taxable Year(s) Beginning in 2024
Short-Tail Lines of Business
Accident Year
Auto Physical
DamageFidelity/Surety
Financial Guaranty/
Mortgage GuarantyInternationalOther*
2024 98.2294 95.3527 94.8106 95.5017 96.7165
2023 97.1719 97.1719 97.1719 97.1719 97.1719
Taxpayer Not Using Composite Method
2022 98.6826 98.6826 98.6826 98.6826 98.6826
2021 98.5999 98.5999 98.5999 98.5999 98.5999
2020 98.4834 98.4834 98.4834 98.4834 98.4834
2019 98.4785 98.4785 98.4785 98.4785 98.4785
Years before 2019 98.5513 98.5513 98.5513 98.5513 98.5513
Taxpayer Using the Composite Method
Years before 2023 98.6826 98.6826 98.6826 98.6826 98.6826
* For the Accident and Health line of business (other than disability income or credit disability insurance), the discount
factor for taxable year 2024 is 98.4349 percent.

Bulletin No. 2025–11 1097 March 10, 2025
Table 3 (part B)
Discount Factors Under Section 846 (percent)
For Taxable Year(s) Beginning in 2024
Short-Tail Lines of Business
Accident
Year
Reinsurance -
Nonproportional
Assumed
Financial Lines
Reinsurance -
Nonproportional
Assumed
Liability
Reinsurance -
Nonproportional
Assumed
Property
Special Property
(Fire,
Allied Lines,
Inland Marine,
Earthquake,
Burglary & Theft)Warranty
Short-Tail
Composite
2024 95.4724 94.4556 95.8586 97.3675 98.2204 96.9644
2023 97.1719 97.1719 97.1719 97.1719 97.1719 97.1719
Taxpayer Not Using Composite Method
2022 98.6826 98.6826 98.6826 98.6826 98.6826 98.6826
2021 98.5999 98.5999 98.5999 98.5999 98.5999 98.5999
2020 98.4834 98.4834 98.4834 98.4834 98.4834 98.4834
2019 98.4785 98.4785 98.4785 98.4785 98.4785 98.4785
Years before
2019 98.5513 98.5513 98.5513 98.5513 98.5513 98.5513
Taxpayer Using the Composite Method
Years before
2023 98.6826 98.6826 98.6826 98.6826 98.6826 98.6826

March 10, 2025 1098 Bulletin No. 2025–11
Table 4 (part A)
Discount Factors Under Section 846 (percent)
For Taxable Year(s) Beginning in 2024
Long-Tail Lines of Business
Accident Year
Commercial
Auto/Truck
Liability/Medical
Medical
Professional
Liability -
Claims-Made
Medical
Professional
Liability -
Occurrence
Multiple Peril
Lines
Other
Liability -
Claims-
Made
Other
Liability -
Occurrence
2024 93.5297 90.9642 85.7501 95.0266 90.6679 89.1463
2023 94.6657 92.7807 88.7877 93.8732 92.3628 90.8746
2022 95.5799 93.6166 90.9006 94.3613 92.9667 92.1947
2021 95.4717 93.3572 92.0790 93.4173 92.4864 91.2022
2020 94.9861 92.9813 92.4445 91.0317 91.7488 90.2789
2019 94.8102 92.9821 93.1951 91.2099 92.2519 90.3215
2018 95.3260 94.2423 94.3189 91.3154 93.0770 90.7788
2017 94.9804 95.1291 94.9993 91.0177 93.8378 91.9830
2016 96.4102 96.0160 96.1220 93.5200 94.9264 92.6228
2015 98.3585 97.7503 97.7902 94.8530 96.6876 94.4974
Taxpayer Not Using the Composite Method
2014 98.5513 98.5513 98.5513 96.1895 98.0033 95.8511
2013 98.5513 98.5513 98.5513 97.5045 98.5513 97.2176
Years before
2013 98.5513 98.5513 98.5513 98.5513 98.5513 98.5513
Taxpayer Using the Composite Method
Years before
2015 98.5513 98.5513 98.5513 96.9185 98.0920 96.7300

Bulletin No. 2025–11 1099 March 10, 2025
Table 4 (part B)
Discount Factors Under Section 846 (percent)
For Taxable Year(s) Beginning in 2024
Long-Tail Lines of Business
Accident Year
Private
Passenger
Auto Liability/
Medical
Products
Liability -
Claims-Made
Products
Liability -
Occurrence
Workers'
Compensation
Long-Tail
Composite
2024 95.4774 88.2374 87.5362 88.0319 92.8228
2023 95.5202 90.4947 89.9028 87.4781 92.7019
2022 95.9333 91.4161 91.6708 87.8161 93.0141
2021 95.0561 84.2953 91.4658 84.4348 90.5906
2020 93.9744 84.4598 89.4430 82.7387 88.2753
2019 94.0072 85.7981 89.4605 82.1401 88.1205
2018 94.5205 87.8040 90.8527 83.2567 88.6258
2017 95.0550 89.0388 91.8072 84.1036 89.1661
2016 95.6473 90.2969 92.1992 84.7150 90.3858
2015 97.7282 91.5785 94.4133 86.5946 92.1457
Taxpayer Not Using the Composite Method
2014 98.5513 92.8838 95.7739 87.8065 93.4541
2013 98.5513 94.2124 97.1571 89.0414 94.7812
2012 98.5513 95.5629 98.5513 90.2995 96.1195
2011 98.5513 96.9299 98.5513 91.5813 97.4421
2010 98.5513 98.2868 98.5513 92.8867 98.5513
2009 98.5513 98.5513 98.5513 94.2154 98.5513
2008 98.5513 98.5513 98.5513 95.5661 98.5513
2007 98.5513 98.5513 98.5513 96.9334 98.5513
2006 98.5513 98.5513 98.5513 98.2913 98.5513
Years before 2006 98.5513 98.5513 98.5513 98.5513 98.5513
Taxpayer Using the Composite Method
Years before 2015 98.5513 94.7288 96.6903 91.2579 95.0968

March 10, 2025 1100 Bulletin No. 2025–11
SECTION 5. PET INSURANCE LINE
OF BUSINESS
The NAIC added Pet Insurance as
a new separate line of business to be
reported in Schedule P of the annual state-
ment for 2024. Pet Insurance was previ-
ously reported as an Inland Marine line of
business, which is reported in Schedule P
as part of the Special Property line of busi-
ness. Under § 1.846-1(b)(1)(iii), which
deals with annual statement changes in
the groupings of individual lines of busi-
ness, unpaid losses for Pet Insurance are
to be discounted using discount factors
published for the Special Property line of
business. See Table 1 (Part B) in section
3 of this revenue procedure and Table 3
(Part B) in section 4 of this revenue pro-
cedure.
SECTION 6. REQUEST FOR
COMMENTS
.01 Comments Regarding Composite
Method. Section V of Notice 88-100 sets
forth a composite method for computing
discounted unpaid losses for accident
years that are not separately reported on
the annual statement. Beginning in 2024,
the NAIC has changed Schedule P of the
annual statement to require ten years of
data (and a “prior” row) to be reported
for all lines of business. The Department
of the Treasury (Treasury Department) and
the Internal Revenue Service (IRS) expect
that composite method discount factors
will be of limited use to insurance com-
panies with respect to the lines of business
set forth in Tables 1 and 3 following the
NAIC change. The Treasury Department
and the IRS request comments on:
(1) whether, and the extent to which,
insurance companies expect to use com-
posite method discount factors with
respect to the lines of business set forth
in Tables 1 and 3 following the NAIC
change;
(2) whether insurance companies need
the Secretary to continue publishing such
composite method discount factors; and
(3) whether insurance companies
require additional guidance regarding the
use of composite method discount factors
with respect to these lines of business.
.02 Procedures for Submitting Com-
ments.
(1) Deadline. Written comments should
be submitted by May 16, 2025.
(2) Form and manner. The subject line
for the comments should include a refer-
ence to Revenue Procedure 2025-15. All
commenters are strongly encouraged to
submit comments electronically. How-
ever, comments may be submitted in one
of two ways:
(a) Electronically via the Federal
eRulemaking Portal at www.regulations.
gov (type IRS-2025-0018 in the search
field on the regulations.gov homepage to
find this revenue procedure and submit
comments); or
(b) By mail to: Internal Revenue Ser-
vice, CC:PA:01:PR (Revenue Procedure
2025-15), Room 5203, P.O. Box 7604,
Ben Franklin Station, Washington, D.C.,
20044.
(3) Publication of comments. The Trea-
sury Department and the IRS will publish
for public availability any comment sub-
mitted electronically or on paper to its
public docket on regulations.gov.
SECTION 7. DRAFTING
INFORMATION
The principal author of this revenue
procedure is James Carpino of the Office
of Associate Chief Counsel (Financial
Institutions & Products). For further infor-
mation regarding this revenue procedure,
contact Mr. Carpino at (202) 317-6905
(not a toll-free call).
26 CFR 601.105: Examination of returns and claims
for refund, credit, or abatement; determination of
correct tax liability.
(Also Part I, §§ 280F; 1.280F-7.)
Rev. Proc. 2025-16
SECTION 1. PURPOSE
This revenue procedure provides: (1)
two tables of limitations on depreciation
deductions for owners of passenger auto-
mobiles placed in service by the taxpayer
during calendar year 2025; and (2) a table
of dollar amounts that must be used to
determine income inclusions by lessees of
passenger automobiles with a lease term
beginning in calendar year 2025. These
tables reflect the automobile price infla-
tion adjustments required by § 280F(d)
(7) of the Internal Revenue Code. For pur-
poses of this revenue procedure, the term
“passenger automobiles” includes trucks
and vans.
SECTION 2. BACKGROUND
.01 For owners of passenger automo-
biles, § 280F(a) imposes dollar limitations
on the depreciation deduction for the year
the taxpayer places the passenger auto-
mobile in service and for each succeeding
year. For passenger automobiles placed in
service after 2018, § 280F(d)(7) requires
the Internal Revenue Service to increase
the amounts allowable as depreciation
deductions by a price inflation adjustment
amount that is determined using the auto-
mobile component of the Chained Con-
sumer Price Index for All Urban Consum-
ers published by the Department of Labor
(C-CPI-U).
.02 Section 168(k)(1) provides that, in
the case of qualified property, the depre-
ciation deduction allowed under § 167(a)
for the taxable year in which the property
is placed in service includes an allowance
equal to the applicable percentage of the
property’s adjusted basis, referred to as
Ҥ 168(k) additional first year deprecia-
tion deduction” hereinafter. Pursuant to §
168(k)(6)(A), the applicable percentage is
100 percent for qualified property acquired
and placed in service after September 27,
2017, and placed in service before January
1, 2023, and is phased down 20 percent
each year for property placed in service
through December 31, 2026. Accordingly,
the applicable percentage for qualified
property acquired after September 27,
2017, and placed in service after Decem-
ber 31, 2024, and before January 1, 2026,
is 40 percent. Pursuant to § 168(k)(8)(D)
(i), no § 168(k) additional first year depre-
ciation deduction is allowed or allowable
for qualified property acquired by the
taxpayer before September 28, 2017, and
placed in service by the taxpayer after
2019. For qualified property acquired
and placed in service after September 27,
2017, § 168(k)(2)(F)(i) increases the first-
year depreciation allowed under § 280F(a)
(1)(A)(i) by $8,000.
.03 Tables 1 and 2 of this revenue pro-
cedure provide depreciation limitations
for passenger automobiles placed in

Bulletin No. 2025–11 1101 March 10, 2025
service by the taxpayer during calendar
year 2025. Table 1 provides depreciation
limitations for passenger automobiles
acquired by the taxpayer after Septem-
ber 27, 2017, and placed in service by
the taxpayer during calendar year 2025,
for which the § 168(k) additional first
year depreciation deduction applies.
Table 2 provides depreciation limita-
tions for passenger automobiles placed
in service by the taxpayer during cal-
endar year 2025 for which no § 168(k)
additional first year depreciation deduc-
tion applies. The § 168(k) additional
first year depreciation deduction does
not apply for 2025 if the taxpayer: (1)
did not use the passenger automobile
during 2025 more than 50 percent for
business purposes; (2) elected out of the
§ 168(k) additional first year deprecia-
tion deduction pursuant to § 168(k)(7)
for the class of property that includes
passenger automobiles; (3) acquired
the passenger automobile used and the
acquisition of such property did not
meet the acquisition requirements in
§ 168(k)(2)(E)(ii) and § 1.168(k)-2(b)
(3)(iii) of the Income Tax Regulations;
or (4) acquired the passenger automo-
bile before September 28, 2017, and
placed it in service after 2019.
.04 Section 280F(c)(2) requires a
reduction to the amount allowable as a
deduction to the lessee of a leased pas-
senger automobile. Pursuant to § 280F(c)
(3), the reduction must be substantially
equivalent to the limitations on the depre-
ciation deductions imposed on owners of
passenger automobiles. Under § 1.280F-
7(a), this reduction is accomplished by
requiring the lessee to include in gross
income an amount determined by apply-
ing a formula to a dollar amount obtained
from a table.
.05 Table 3 of this revenue procedure
provides the dollar amount used by les-
sees of passenger automobiles with a
lease term beginning in 2025 to deter-
mine the income inclusion amount for
those passenger automobiles. The table
provides dollar amounts for a range of
passenger automobile fair market val-
ues.
SECTION 3. SCOPE
.01 The limitations on depreciation
deductions in Tables 1 and 2 in section
4.01(2) of this revenue procedure apply to
passenger automobiles, other than leased
passenger automobiles, that are placed in
service by the taxpayer in calendar year
2025 and continue to apply for each tax-
able year that the passenger automobile
remains in service.
.02 The dollar amounts in Table 3 of
this revenue procedure apply to leased
passenger automobiles with a lease term
beginning in calendar year 2025 and con-
tinue to apply for each taxable year during
the lease.
.03 For other recent calendar years, see
Rev. Proc. 2020-37, 2020-33 I.R.B. 381,
for passenger automobiles placed in ser-
vice or leased during calendar year 2020;
Rev. Proc. 2021-31, 2021-34 I.R.B. 324,
for passenger automobiles placed in ser-
vice or leased during calendar year 2021;
Rev. Proc. 2022-17, 2022-13 I.R.B. 930,
for passenger automobiles placed in ser-
vice or leased during calendar year 2022;
Rev. Proc. 2023-14, 2023-6 I.R.B. 466, for
passenger automobiles placed in service
or leased during calendar year 2023; and
Rev. Proc. 2024-13, 2024-9 I.R.B. 678,
for passenger automobiles placed in ser-
vice or leased during calendar year 2024.
SECTION 4. APPLICATION
.01 Limitations on Depreciation
Deductions for Certain Automobiles.
(1) Amount of the inflation adjustment.
Under § 280F(d)(7)(B)(i), the automo-
bile price inflation adjustment for any
calendar year is the percentage (if any)
by which the C-CPI-U automobile com-
ponent for October of the preceding cal-
endar year exceeds the automobile com-
ponent of the CPI (as defined in § 1(f)
(4)) for October of 2017, multiplied by
the amount determined under § 1(f)(3)
(B). The amount determined under § 1(f)
(3)(B) is the amount obtained by divid-
ing the new vehicle component of the
C-CPI-U for calendar year 2016 by the
new vehicle component of the CPI for
calendar year 2016, where the C-CPI-U
and the CPI for calendar year 2016 means
the average of such amounts as of the
close of the 12-month period ending on
August 31, 2016. Section 280F(d)(7)
(B)(ii) defines the term “C-CPI-U auto-
mobile component” as the automobile
component of the Chained Consumer
Price Index for All Urban Consumers as
described in § 1(f)(6). The product of
the October 2017 CPI new vehicle com-
ponent (144.868) and the amount deter-
mined under § 1(f)(3)(B) (0.694370319)
is 100.592. The new vehicle component
of the C-CPI-U released in November
2024 was 123.153 for October 2024. The
October 2024 C-CPI-U new vehicle com-
ponent exceeded the product of the Octo-
ber 2017 CPI new vehicle component and
the amount determined under § 1(f)(3)(B)
by 22.561 (123.153 - 100.592). The per-
centage by which the C-CPI-U new vehi-
cle component for October 2024 exceeds
the product of the new vehicle component
of the CPI for October of 2017 and the
amount determined under § 1(f)(3)(B) is
22.428 percent (22.561/100.592 x 100%),
the automobile price inflation adjustment
for 2025 for passenger automobiles. The
dollar limitations in § 280F(a) are there-
fore multiplied by a factor of 0.22428,
and the resulting increases, after rounding
to the nearest $100, are added to the 2018
limitations to give the depreciation lim-
itations applicable to passenger automo-
biles for calendar year 2025. This adjust-
ment applies to all passenger automobiles
that are placed in service in calendar year
2025.
(2) Amount of the limitation. Tables 1
and 2 of this revenue procedure contain
the depreciation limitation for each taxable
year for passenger automobiles a taxpayer
placed in service during calendar year
2025. Use Table 1 for a passenger auto-
mobile to which the § 168(k) additional
first year depreciation deduction applies
that is acquired by the taxpayer after Sep-
tember 27, 2017, and placed in service by
the taxpayer during calendar year 2025;
use Table 2 for a passenger automobile
for which no § 168(k) additional first year
depreciation deduction applies.

March 10, 2025 1102 Bulletin No. 2025–11
REV. PROC. 2025-16 TABLE 1
DEPRECIATION LIMITATIONS FOR PASSENGER AUTOMOBILES ACQUIRED AFTER SEPTEMBER 27, 2017, AND
PLACED IN SERVICE DURING CALENDAR YEAR 2025, FOR WHICH THE § 168(k) ADDITIONAL FIRST YEAR
DEPRECIATION DEDUCTION APPLIES
Tax YearAmount
1st Tax Year$ 20,200
2nd Tax Year$ 19,600
3rd Tax Year$ 11,800
Each Succeeding Year$ 7,060
REV. PROC. 2025-16 TABLE 2
DEPRECIATION LIMITATIONS FOR PASSENGER AUTOMOBILES
PLACED IN SERVICE DURING CALENDAR YEAR 2025 FOR WHICH NO § 168(k) ADDITIONAL FIRST YEAR
DEPRECIATION DEDUCTION APPLIES
Tax YearAmount
1st Tax Year$ 12,200
2nd Tax Year$ 19,600
3rd Tax Year$ 11,800
Each Succeeding Year$ 7,060
.02 Inclusions in Income of Lessees of
Passenger Automobiles.
A taxpayer must follow the procedures
in § 1.280F-7(a) for determining the inclu-
sion amounts for passenger automobiles
with a lease term beginning in calendar
year 2025. In applying these procedures,
lessees of passenger automobiles should
use Table 3 of this revenue procedure.

Bulletin No. 2025–11 1103 March 10, 2025
REV. PROC. 2025-16 TABLE 3
DOLLAR AMOUNTS FOR PASSENGER AUTOMOBILES
WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2025
Fair Market Value of
Passenger Automobile
Over
Fair Market Value of
Passenger Automobile
Not Over
1
st
Tax Year
During
Lease
2
nd
Tax Year
During Lease
3
rd
Tax Year
During Lease
4
th
Tax Year
During Lease
5
th
Tax Year
During Lease
& Later
62,00064,0001326364350
64,00066,00025537892107
66,00068,0003881118142163
68,00070,00050109159191220
70,00072,00063136201240277
72,00074,00076164241289334
74,00076,00088192282338391
76,00078,000101219324387447
78,00080,000113247364437504
80,00085,000135295437522604
85,00090,000167364539646745
90,00095,000198434641768888
95,000100,0002305027448921,029
100,000110,0002776068981,0761,242
110,000120,0003407441,1031,3221,525
120,000130,0004038821,3081,5681,809
130,000140,0004661,0211,5121,8142,093
140,000150,0005291,1591,7172,0602,377
150,000160,0005921,2971,9232,3052,661
160,000170,0006551,4352,1282,5512,945
170,000180,0007181,5732,3332,7973,229
180,000190,0007811,7112,5383,0433,513
190,000200,0008441,8502,7423,2893,797
200,000210,0009071,9882,9483,5344,081
210,000220,0009702,1263,1533,7804,364
220,000230,0001,0332,2643,3584,0264,648
230,000240,0001,0962,4023,5634,2724,932
240,000and over1,1592,5403,7684,5185,216
SECTION 5. EFFECTIVE DATE
This revenue procedure applies to
passenger automobiles placed in service
during calendar year 2025 or with a lease
term beginning in calendar year 2025.
SECTION 6. DRAFTING
INFORMATION
The principal author of this revenue
procedure is Knolan Smith of the Office
of Associate Chief Counsel (Income Tax
& Accounting). For further information
regarding this revenue procedure, contact
Mr. Smith at (202) 317-7005 (not a toll-
free number).

Bulletin No. 2025–11 i March 10, 2025
Definition of Terms
Revenue rulings and revenue procedures
(hereinafter referred to as “rulings”) that
have an effect on previous rulings use the
following defined terms to describe the
effect:
Amplified describes a situation where
no change is being made in a prior pub-
lished position, but the prior position is
being extended to apply to a variation of
the fact situation set forth therein. Thus,
if an earlier ruling held that a principle
applied to A, and the new ruling holds that
the same principle also applies to B, the
earlier ruling is amplified. (Compare with
modified, below).
Clarified is used in those instances
where the language in a prior ruling is
being made clear because the language
has caused, or may cause, some confu-
sion. It is not used where a position in a
prior ruling is being changed.
Distinguished describes a situation
where a ruling mentions a previously pub-
lished ruling and points out an essential
difference between them.
Modified is used where the substance
of a previously published position is being
changed. Thus, if a prior ruling held that a
principle applied to A but not to B, and the
new ruling holds that it applies to both A
and B, the prior ruling is modified because
it corrects a published position. (Compare
with amplified and clarified, above).
Obsoleted describes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transactions.
This term is most commonly used in a ruling
that lists previously published rulings that
are obsoleted because of changes in laws or
regulations. A ruling may also be obsoleted
because the substance has been included in
regulations subsequently adopted.
Revoked describes situations where the
position in the previously published ruling
is not correct and the correct position is
being stated in a new ruling.
Superseded describes a situation where
the new ruling does nothing more than
restate the substance and situation of a
previously published ruling (or rulings).
Thus, the term is used to republish under
the 1986 Code and regulations the same
position published under the 1939 Code
and regulations. The term is also used
when it is desired to republish in a single
ruling a series of situations, names, etc.,
that were previously published over a
period of time in separate rulings. If the
new ruling does more than restate the sub-
stance of a prior ruling, a combination of
terms is used. For example, modified and
superseded describes a situation where the
substance of a previously published ruling
is being changed in part and is continued
without change in part and it is desired to
restate the valid portion of the previously
published ruling in a new ruling that is
self contained. In this case, the previously
published ruling is first modified and then,
as modified, is superseded.
Supplemented is used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names
in subsequent rulings. After the original
ruling has been supplemented several
times, a new ruling may be published that
includes the list in the original ruling and
the additions, and supersedes all prior rul-
ings in the series.
Suspended is used in rare situations
to show that the previous published rul-
ings will not be applied pending some
future action such as the issuance of new
or amended regulations, the outcome of
cases in litigation, or the outcome of a
Service study.
Abbreviations
The following abbreviations in current
use and formerly used will appear in
material published in the Bulletin.
A—Individual.
Acq.—Acquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cumulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Cooperative.
Ct.D.
—Court Decision.
CY—County.
D—Decedent.
DC—Dummy Corporation.
DE—Donee.
Del. Order—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Employer.
ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduciary.
FC—Foreign Country.
FICA—Federal Insurance Contributions Act.
FISC—Foreign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Federal Unemployment Tax Act.
FX—Foreign corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grantee.
GP—General Partner.
GR—Grantor.
IC—Insurance Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited Partner.
LR—Lessor.
M—Minor.
Nonacq.—Nonacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Personal Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Partnership.
PTE—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Real Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsidiary.
S.P.R.—Statement of Procedural Rules.
Stat.—Statutes at Large.
T—Target Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Transferee.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpayer.
TR—Trust.
TT—Trustee.
U.S.C.—United States Code.
X—Corporation.
Y—Corporation.
Z—Corporation.

March 10, 2025 ii Bulletin No. 2025–11
Numerical Finding List
1
Bulletin 2025–11
Announcements:
2025-2, 2025-2 I.R.B. 305
2025-3, 2025-2 I.R.B. 306
2025-4, 2025-2 I.R.B. 306
2025-1, 2025-3 I.R.B. 431
2025-5, 2025-3 I.R.B. 433
2025-6, 2025-5 I.R.B. 526
Notices:
2025-1, 2025-3 I.R.B. 415
2025-2, 2025-3 I.R.B. 418
2025-4, 2025-3 I.R.B. 419
2025-5, 2025-3 I.R.B. 426
2025-3, 2025-4 I.R.B. 488
2025-7, 2025-5 I.R.B. 524
2025-9, 2025-6 I.R.B. 681
2025-10, 2025-6 I.R.B. 682
2025-11, 2025-6 I.R.B. 704
2025-13, 2025-6 I.R.B. 710
2025-6, 2025-8 I.R.B. 799
2025-8, 2025-8 I.R.B. 800
2025-12, 2025-8 I.R.B. 813
2025-14, 2025-10 I.R.B. 980
2025-15, 2025-11 I.R.B. 1089
Proposed Regulations:
REG-117213-24, 2025-3 I.R.B. 433
REG-134420-10, 2025-4 I.R.B. 513
REG-105479-18, 2025-5 I.R.B. 527
REG-116610-20, 2025-5 I.R.B. 638
REG-115560-23, 2025-6 I.R.B. 716
REG-123525-23, 2025-6 I.R.B. 726
REG-124930-21, 2025-7 I.R.B. 772
REG-100669-24, 2025-8 I.R.B. 819
REG-101268-24, 2025-8 I.R.B. 836
REG-107420-24, 2025-8 I.R.B. 854
REG-116085-23, 2025-8 I.R.B. 865
REG-118988-22, 2025-8 I.R.B. 869
REG-107895-24, 2025-9 I.R.B. 972
REG-110878-24, 2025-9 I.R.B. 979
REG-112261-24, 2025-10 I.R.B. 983
Revenue Procedures:
2025-1, 2025-1 I.R.B. 1
2025-2, 2025-1 I.R.B. 118
2025-3, 2025-1 I.R.B. 142
2025-4, 2025-1 I.R.B. 158
2025-5, 2025-1 I.R.B. 260
2025-7, 2025-1 I.R.B. 301
2025-8, 2025-3 I.R.B. 427
2025-9, 2025-4 I.R.B. 491
2025-10, 2025-4 I.R.B. 492
2025-11, 2025-4 I.R.B. 501
Revenue Procedures:—Continued
2025-12, 2025-4 I.R.B. 512
2025-6, 2025-6 I.R.B. 713
2025-14, 2025-7 I.R.B. 770
2025-13, 2025-8 I.R.B. 816
2025-15, 2025-11 I.R.B. 1090
2025-16, 2025-11 I.R.B. 1100
Revenue Rulings:
2025-1, 2025-3 I.R.B. 307
2025-2, 2025-3 I.R.B. 309
2025-3, 2025-4 I.R.B. 443
2025-4, 2025-7 I.R.B. 758
2025-5, 2025-7 I.R.B. 767
2025-6, 2025-11 I.R.B. 1064
Treasury Decisions:
10016, 2025-3 I.R.B. 313
10020, 2025-3 I.R.B. 408
10018, 2025-4 I.R.B. 446
10019, 2025-4 I.R.B. 482
10017, 2025-5 I.R.B. 517
10028, 2025-6 I.R.B. 660
10022, 2025-8 I.R.B. 773
10026, 2025-9 I.R.B. 878
10027, 2025-9 I.R.B. 897
10029, 2025-9 I.R.B. 936
10030, 2025-11 I.R.B. 1066
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2024–27 through 2024–52 is in Internal Revenue Bulletin
2024–52, dated December 23, 2024.

Bulletin No. 2025–11 iii March 10, 2025
Finding List of Current Actions on
Previously Published Items
1
Bulletin 2025–11
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2024–27 through 2024–52 is in Internal Revenue Bulletin
2024–52, dated December 23, 2024.

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We Welcome Comments About the Internal Revenue Bulletin
If you have comments concerning the format or production of the Internal Revenue Bulletin or suggestions for improving it,
we would be pleased to hear from you. You can email us your suggestions or comments through the IRS Internet Home Page
www.irs.gov) or write to the Internal Revenue Service, Publishing Division, IRB Publishing Program Desk, 1111 Constitution Ave.
NW, IR-6230 Washington, DC 20224.