IRS Opens New Office to Encourage Alternative Dispute Resolution

In a significant move to revitalize and enhance the efficiency of tax dispute resolutions, the IRS has recently established a new Alternative Dispute Resolution (ADR) Program Management Office. This strategic initiative follows a substantial decline in ADR engagement, as detailed in a 2023 Government Accountability Office report. ADR utilization has decreased by 65%  from 429 cases in 2014 to just 119 in 2022.

The creation of the ADR Program Management Office is aimed at addressing the inefficiencies and underutilization highlighted by the GAO. IRS Acting Chief of Appeals, Liz Askey, indicated the new office will focus on robust management of ADR processes, data collection, and establishing a central point of contact for taxpayers and their representatives. This centralized approach is expected to streamline the process, making it more transparent and accessible.

The office is tasked with a two-fold mission: 1) to increase internal and external awareness and education about ADR options available to taxpayers, and 2) to enhance the flexibility and user-friendliness of these programs. As new personnel join the IRS, ensuring they are well-informed about ADR and its benefits is a priority to reverse the trend of declining participation.

A significant part of the new strategy includes piloting innovative approaches to traditional ADR methods, including revising the Fast Track Settlement program to allow for earlier and more flexible dispute intervention. This modification is designed to facilitate faster resolutions, particularly beneficial in less complex, small-dollar cases, which are less resource-intensive yet still important for the parties involved.

Additionally, the ADR office plans to remove existing barriers to participation in post-appeals mediation and other ADR processes. This includes testing programs that allow for mediation earlier in the examination process and simplifying guidelines to make ADR more accessible.

For Connecticut small business owners and individuals, these enhancements could represent significant time and cost savings. By providing a less formal, dialogue-based resolution process, the IRS is moving towards a more taxpayer-friendly approach. This is particularly advantageous for small businesses that may lack the resources to engage in prolonged legal disputes.

For those needing assistance or more detailed guidance, we provide the necessary support to effectively engage with these updated IRS processes.

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