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<xTITLE>IRS Mediation Pilot</xTITLE>

IRS Mediation Pilot

by Colin Rule
February 2013

Novo Justice Blog by Colin Rule

Colin Rule

Michael A. Jacobs and Robert E. Weyman, Reed Smith:

“Taxpayers under audit and facing an assessment in excess of $1 million may be able to participate in mediation to expedite resolution of their case as part of a new Department pilot program. The timeframe for requesting to participate in the mediation program is limited, so taxpayers should be prepared to make the request prior to their exit conference.

Responding to taxpayer concerns that the appeal process in Massachusetts can take several years, the Department finalized guidance regarding its new administrative early mediation program. The pilot program is intended to resolve disputes within four months after the finalization of an audit through the use of mediation.

In order for a case to head to mediation, both the taxpayer and the Department must agree that mediation is appropriate—otherwise, standard appeal rules apply. While the administrative guidance lays out broad guidelines for the types of cases that the Department will deem appropriate for mediation, how they will be applied in practice remains to be seen. Our view is that the program could be extremely popular with taxpayers if the Department is open to considering a wide variety of cases for mediation.

Takeaways

Mediation must be agreed to prior to the issuance of the Notice of Intent to Assess by the Department
The exit interview is probably the best time to make the request
Mediation must be complete within four months absent unusual circumstances
Mediation must resolve all issues in the assessment; taxpayers cannot request mediation for only some issues in the assessment and appeal the rest
The program is available for proposed assessments in excess of $1 million where the issues and facts are fully developed
The Department’s goal is for the pilot program to include six to ten cases. Our understanding is that slots are still available in the pilot program.
If mediation is unsuccessful, the Department has put protections in place to prevent taxpayer’s (and the Department’s) submissions to the mediator from becoming discoverable in later litigation”
I think the IRS is an ideal candidate for ODR. Someone has to make this connection!

Biography


Colin Rule is CEO of Mediate.com.  From 2017 to 2020 Colin was Vice President for Online Dispute Resolution at Tyler Technologies. Tyler acquired Modria.com, an ODR provider Colin co-founded, in 2017. From 2003 to 2011 Colin was Director of Online Dispute Resolution for eBay and PayPal.  Colin co-founded Online Resolution, one of the first online dispute resolution (ODR) providers, in 1999 and served as its CEO and President.  Colin worked for several years with the National Institute for Dispute Resolution (now ACR) in Washington, D.C. and the Consensus Building Institute in Cambridge, MA.

Colin is the author of Online Dispute Resolution for Business, published by Jossey-Bass in September 2002, and co-author of The New Handshake: Online Dispute Resolution and the Future of Consumer Protection, published by the ABA in 2017. He received the first Frank Sander Award for Innovation in ADR from the American Bar Association in 2020, and the Mary Parker Follett Award from the Association for Conflict Resolution in 2013. He holds a Master’s degree from Harvard University’s Kennedy School of Government in conflict resolution and technology, a graduate certificate in dispute resolution from UMass-Boston, a B.A. from Haverford College, and he served as a Peace Corps volunteer in Eritrea from 1995-1997.  You can read many of his articles and see some of his talks at colinrule.com/writing.



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