Issue Number: Tax Tip 2025-34
Mediation can help taxpayers resolve tax issues
Mediation – also known as alternative dispute resolution – can help taxpayers resolve tax issues early and efficiently.
The process provides taxpayers a faster, more collaborative and cost-effective approach to case resolution. The traditional appeal process is still available for taxpayers who choose it.
Mediation might be right for a taxpayer if:
- The taxpayer wants to resolve the dispute at the earliest possible stage of their audit.
- The taxpayer doesn’t have many disputed issues.
- The taxpayer gave the IRS information to support their position.
- The IRS is still considering the taxpayer’s case and issues remain unresolved.
Mediation is:
- Voluntary for both parties.
- Nonbinding, meaning each party retains 100% control over whether to settle the case. No one can force either party to do something they don’t agree to do.
- Effective when both parties have a desire to resolve the disputed issue.
- A chance to avoid a lengthy appeal process or costly litigation.
Mediation is not:
- Required by either party.
- A replacement for the audit or collection process.
- A process in which the parties in the dispute offer arguments directly to the mediator hoping to “win.”
- Effective if either party believes the only way the dispute will get resolved is if the other party concedes or gives up on its position.
- A time to present new information or raise new issues.
- An opportunity to try and get a more favorable outcome or delay the examination or collection process.
Primary alternative dispute resolution programs:
- Fast Track Settlement – when the parties can choose to seek mediation for unresolved issues in the examination process.
- Post Appeals Mediation – when the parties can seek mediation for unresolved issues remaining at the conclusion of a traditional Appeals proceeding.
Mediation works best if taxpayers prepare for success. Find out what to expect from the Independent Office of Appeals.
More information
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