IRS Expands Post-Appeal Mediation to Some Offer-In-Compromise Cases

To err is human. To collaboratively reach an agreement through mediation is divine. At least that’s what the IRS thinks. The IRS Office of Appeals launched its post-Appeals mediation pilot program for Offers in Compromise and Trust Fund Recovery Penalty cases in a handful of cities in December 2008. It is now rolling out the program to all taxpayers across the U.S.

Mediation is optional. It can be requested by either the taxpayer or by an IRS appeals officer. If the request comes from an appeals officer, you are under no obligation to agree to participate. If you agree to mediation, the IRS’s stated goal is to have the dispute settled within 60 to 90 days.

Unlike mediation in civil litigation cases where you can expect to pay anywhere from $1,000 to $2,000 per day for a private mediator, the IRS offers an Appeals Officer trained in mediation techniques to serve as a mediator in your case at no cost to you. You also have the option of paying a qualified non-IRS mediator to serve as a co-mediator. Whether you use an IRS mediator or obtain your own, the mediator is there to facilitate an agreement between you and the IRS, and he or she does not have any authority to make a settlement decision for the parties. Mediation is available for appeals of both legal and factual issues

Offers in Compromise Cases (OIC)

In OIC cases, mediation is available to resolve disputes over the value of assets, projections of future income and/or a taxpayer’s interest in jointly held assets. It is not available in situations where the taxpayer has the ability to pay in full or if the taxpayer’s liability has already been determined through appeals.

Trust Fund Recovery Penalty Cases (TFRP)

In TFRP cases, you can mediate questions relating to whether a person was required to pay a tax or failed to pay a tax, but not questions of whether a penalty is collectible.

If you agree to mediation and cannot reach a settlement, the IRS will issue a Notice of Deficiency to you, meaning you will have 90 days to file a case in the tax court contesting the IRS assessment of tax against you.

If you have a dispute with the IRS and have either been offered the opportunity to mediate, or you are considering requesting mediation yourself, the professionals at Nielsen Law Group can assist you in determining eligibility criteria and inform you as to procedures for initiating a post-appeals mediation request. Call (480) 888-7111 today or submit a web request here.