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Mediation in the tax appeals process

The length of time it takes to resolve a tax collection case with the IRS depends on many factors. A tax court hearing and subsequent appeal can stretch a case out over years.

For that reason, it is often preferable to use every available means to settle early. One way to speed up the process is IRS Fast Track Mediation-Collection (FTMC). In some cases, an IRS Office of Appeals mediator may be able to help you resolve disputed issues.

Where does mediation fit into the appeals process?

The request to mediate can be made prior to an appeals division hearing. Similar to mediation in any civil legal matter, you and the IRS get to present your case.

After hearing from each party, the mediator may recommend a resolution based on his or her analysis of the issues presented. This recommendation is not binding, but may address weak points and offer a preview of how the court might decide the issue.

After the mediation session, the mediator sends a written report to you and a Collection Group Manager. If the report helps resolve any disputes, the case will be closed. When it doesn’t, you can file a traditional request for an IRS Appeals hearing.

What type of cases may be appropriate?

Mediation is not appropriate once your case has been referred to the Department of Justice or in cases where you have not responded to IRS communications or submitted requested documentation.

When can mediation help solve a dispute? Here are a few:

  • Trust fund recovery penalties
  • Offer-in-compromise and questions related to deviations from expense standards and the ability to pay living expenses
  • Valuation of assets and proportionate interest in jointly-held assets 

Talk with a tax attorney to learn if mediation might be a viable option to resolve your tax problems.

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