The IRS is putting a renewed spotlight on its mediation programs as an effective way for taxpayers to resolve disputes without the cost and time of litigation or formal appeals. As part of a broader push toward efficiency and taxpayer service, the agency is encouraging individuals and businesses to consider mediation as a primary step when stuck in disagreement with the IRS.
This reminder comes from a newly published IRS news release on May 29, 2025, emphasizing how mediation can “save time, money, and stress” — especially for small businesses and solo taxpayers navigating the complex audit or appeals process.
The IRS offers several formal alternative dispute resolution (ADR) tools:
Mediators involved are impartial IRS employees trained to facilitate productive negotiations not to act as judges.
The traditional IRS appeals process is slow. With backlogs growing and audit activity increasing for high-income earners and SMBs, mediation offers:
And while the mediation process isn’t binding, it creates a low-risk, high-leverage opportunity for resolution — a huge win for under-resourced taxpayers.
While not suitable for all disputes (e.g., criminal or frivolous tax positions), mediation is increasingly being seen as a practical, good-faith solution.
For CPAs, tax attorneys, and enrolled agents:
Proactively identifying eligible cases can save time and build client trust — especially as scrutiny around high-dollar returns intensifies.
As the IRS continues to modernize its compliance strategy, expect further adoption of tools like AI risk scoring and voluntary resolution tracks like mediation. Taxpayers who engage early and negotiate in good faith stand to benefit.
For the full IRS release, visit irs.gov
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