IRS Seeks Advice on How It Can Improve Dispute Resolution Programs

The IRS is asking for public input on improvements that can be made to certain post-filing alternative dispute resolution (ADR) programs currently offered to taxpayers.

“The IRS is greatly interested in examining ways to help to reduce the time, costs and administrative burden for taxpayers and the government in resolving tax disputes,” Chief of Appeals Andy Keyso said in a press release. “We’re open to all suggestions about how to better use ADR techniques to help expedite their fair resolution.”

Over the past two decades, the IRS has offered four principal post-filing ADR programs:

Fast Track Settlement (FTS): Available to taxpayers under audit and in the jurisdiction of Large Business & International (LB&I), Small Business and Self Employed (SB/SE), or Tax Exempt and Government Entities (TEGE) divisions. Under FTS, an independent appeals mediator assists the taxpayer and the IRS to try to reach an agreement on disputed issues, facilitating settlement discussions, and offering settlement proposals.

Fast Track Mediation – Collection (FTMC): Available for certain collection cases and issues to help taxpayers resolve disputes resulting from offers in compromise and trust fund recovery penalties. Collection due process cases and cases worked at a collection campus site are some of the cases excluded from FTMC. Under FTMC, an independent appeals mediator assists the taxpayer and the IRS to try to reach an agreement on disputed issues.

Rapid Appeals Process (RAP): Available to most LB&I cases or SB/SE estate and gift cases, RAP consists of a pre-appeals conference in which IRS appeals utilizes mediation techniques to try to resolve unagreed issues while the case is in appeals’ jurisdiction. RAP enables taxpayers and IRS appeals to work together to expedite the resolution of unagreed issues in appeals and is meant to be completed in one conference.

Post Appeals Mediation (PAM): Available if IRS appeals settlement discussions are unsuccessful and the remaining disputed issues are fully developed. Cases for which tax disputes have been previously mediated through a different ADR program, such as through FTS, are ineligible for PAM. PAM is available to resolve disputed tax issues that originate from an IRS audit or to resolve disputed tax issues that originate through IRS tax collection actions.

The IRS said it is interested in suggestions to improve the administration of these ADR programs and in proposals for other approaches to ADR that can increase the use and efficacy of ADR in the resolution of tax disputes.

Comments can be sent to ap.adr.programs@irs.gov by Aug. 25, specifically concerning:

Reasons taxpayers choose not to use ADR programs, and potential modifications to these programs that can remedy taxpayer concerns.
Issues that are currently excluded from ADR programs that should not be excluded.
Other ways in which ADR programs could be improved.
Suggestions for how best to educate taxpayers and representatives about ADR programs.
Experiences with the use of mediators from the IRS Independent Office of Appeals, and suggestions for how appeals can ensure that mediators promote an ADR engagement that is conducive to settlement.
Suggestions for how best to extend the use of these or other ADR programs to taxpayer segments that may be less aware of, or familiar with, ADR, such as small business and low-income taxpayers, and whether any unique characteristics of these segments necessitate modified ADR procedures.
Feedback about experiences with the IRS when ADR programs were offered or not offered by IRS personnel or were denied when requested by taxpayers.
Feedback about whether there are types of cases when ADR has proven particularly useful (e.g., valuation cases) and, if so, how ADR use can be increased in these types of cases.
Ideas to achieve tax certainty or resolution sooner beyond these existing ADR programs, including ideas for new ADR programs.