IRS Highlights Mediation as a Faster Path to Resolving Tax Disputes

Adam Tahir
6 days ago
2 min read

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.

What the Mediation Programs Include

The IRS offers several formal alternative dispute resolution (ADR) tools:

Fast Track Settlement (FTS): For cases already under audit. Taxpayers and exam teams meet with an Appeals mediator to reach a settlement before a formal appeal is needed.
Fast Track Mediation – Collection (FTMC): Focused on collection disputes like installment agreements or liens.
Post-Appeals Mediation (PAM): Available when traditional appeals fail, giving taxpayers one final attempt at resolution before court.

Mediators involved are impartial IRS employees trained to facilitate productive negotiations not to act as judges.

Why It Matters

The traditional IRS appeals process is slow. With backlogs growing and audit activity increasing for high-income earners and SMBs, mediation offers:

Speed: Most cases settle within 60 days of entering mediation.
Control: Taxpayers retain the ability to present their position and negotiate.
Cost savings: Avoiding court or prolonged audit reviews can save thousands in professional fees.

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.

Who Should Consider It?

Taxpayers undergoing an IRS audit with issues of fact or law.
Businesses disputing penalties, deductions, or method of accounting adjustments.
Anyone whose appeals process has stalled and wants a last chance at resolution before litigation.

While not suitable for all disputes (e.g., criminal or frivolous tax positions), mediation is increasingly being seen as a practical, good-faith solution.

Tax Planning Implications

For CPAs, tax attorneys, and enrolled agents:

Flag clients with ongoing audits or appeals for potential ADR use.
Incorporate mediation into your dispute resolution playbook.
Educate clients early about their rights and low-risk options.

Proactively identifying eligible cases can save time and build client trust — especially as scrutiny around high-dollar returns intensifies.

What’s Next?

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

How Bizora Can Help

Bizora AI helps tax professionals:

Instantly summarize key IRS programs like FTS and PAM.
Generate plain-English client briefings.
Compare resolution strategies across multiple IRS pathways.

Want to quickly evaluate whether a client qualifies for IRS mediation?→ Try Bizora’s Tax Strategy Mode here