Ban on raising new issues on appeal

(a) In general Chapter 77 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section: 7531. Prohibition on Internal Revenue Service raising new issues in an internal appeal (a) In general In reviewing an appeal of any determination initially made by the Internal Revenue Service, the Internal Revenue Service Independent Office of Appeals may not consider or decide any issue that is not within the scope of the initial determination. (b) Certain issues deemed outside of scope of determination For purposes of subsection (a), the following matters shall be considered to be not within the scope of a determination: (1) Any issue that was not raised in a notice of deficiency or an examiner's report which is the subject of the appeal. (2) Any deficiency in tax which was not included in the initial determination. (3) Any theory or justification for a tax deficiency which was not considered in the initial determination. (c) No inference with respect to issues raised by taxpayers Nothing in this section shall be construed to provide any limitation in addition to any limitations in effect on the date of the enactment of this section on the right of a taxpayer to raise an issue, theory, or justification on an appeal from a determination initially made by the Internal Revenue Service that was not within the scope of the initial determination.. (b) Clerical amendment The table of sections for chapter 77 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item: Sec. 7531. Prohibition on Internal Revenue Service raising new issues in an internal appeal.. (c) Effective date The amendments made by this section shall apply to matters filed or pending with the Internal Revenue Service Independent Office of Appeals on or after the date of the enactment of this Act.