Who is ultimately responsible for the fees and costs of an arbitrator in a tax appeal?

In the context of tax appeals, it is typically the case that the fees and costs of an arbitrator are ultimately borne by the party whose valuation is not selected. This is because arbitration is a process designed to resolve disputes on the basis of the evidence presented, and when one party's valuation is favored over the other, it stands to reason that the party whose position was not upheld should be responsible for the costs incurred in the arbitration process.

This principle underlies the rationale of ensuring fairness in the resolution of disputes. If the arbitrator sides against a party, that party may also be seen as having subjected the other party to the expenses of the arbitration by their insistence on a valuation different from what the review process determined to be accurate or fair. Therefore, by placing the financial burden on the party whose value was not accepted, the system incentivizes parties to present reasonable and justifiable valuations based on objectively verifiable data.

Other options point towards alternative assumptions regarding who should bear the costs, but they don't align with the principles of arbitration in tax appeal cases as clearly as the correct answer does. For example, assuming that costs would fall to the taxpayer or the government entities could lead to an imbalanced scenario where the motivations for presenting unrealistic valuations might not