Overview of ADR Options at the IRS - Journal of Comsumer ...

taxpayers and issues. It is important for taxpayers to take advantageof the programs early in the dispute resolution process to preventproblems such as a lapse in the statute of limitations. Some of theadvantages for using ADR at the IRS are:• It provides a different avenue of resolving disputes when anagreement can not be reached between with the taxpayerand the examiner;• The taxpayer becomes a person, not a number, because themeetings and proceedings are informal;• Even in situations where the alternative dispute resolutionmechanisms do not work for the parties, they havea relationship which may prove valuable in futureproceedings;• The proceedings offer confidentiality for those parties whoprefer not to have a public trial or for their information tobe made public.While the ADR programs at the IRS have their advantages,they also have disadvantages. Some issues will not be resolvedthrough mediation so that a precedent can be set. There aresome instances when litigating a dispute in the court systemwould be quicker and cheaper than using ADR. Despite thepossible disadvantages, however, the alternative dispute resolutionprograms at the IRS seem to be effective. According to the Officeof the National Director of Appeals:• 84% of respondents said they would use Appeals again;• 70% were completely or somewhat satisfied with Appealsfairness and impartiality; and• 70% were completely or somewhat satisfied with the overallAppeals process. 23Based on these statistics, it seems as though alternative disputeresolution will continue to be a part of the Internal RevenueService. It has gained acceptance in the early stages, and withtime and improvement, it may eventually reduce or eliminate theneed for litigation of tax issues.For more information about ADR at the IRS, visit itswebsite, www.irs.gov (keyword “appeals”).*Shannon Thomas is a third year law student at the University ofHouston Law Center. She received her J.D. in May 2007.1. The Administrative Dispute Resolution Act of 1996, Pub. L.No. 104-320, § 2.2. 5 U.S.C.A. § 571 (1996).3. The Administrative Dispute Resolution Act of 1996, Pub. L.No. 104-320, § 2.4. Id. at § 3.5. Saltzman, Michael, IRS Practice and Procedure, §8.02, 1999WL 1050935, also available at http://www.irs.gov/irs/article/0,,id=149197,00.html (last accessed Apr. 18 2007).6. Id; see also http://www.irs.gov/irs/article/0,,id=149199,00.html(last accessed Apr. 18 2007).7. Id.8. Id.9. Rev. Proc. 99-28, 1999-29 I.R.B. 109.10. Internal Revenue Service, Department of Treasury, Publication4167, Appeals, (2005).11. Id.12. Id.13. Id.14. Rev. Proc. 2003-41, 2003-25 I.R.B. 1047.15. Id.16. Rev. Proc. 2003-40, 2003-25 I.R.B. 1044.17. Id.18. Rev. Proc. 2006-44, 2006-44 I.R.B. 800.19. John M. Beehler, IRS Alternative Dispute Resolution Initiatives,THE TAX ADVISOR (Feb. 2000).20. Id.21. Gregory P. Matthews, Using Negotiation, Mediation, andArbitration to Resolve IRS-Taxpayer Disputes, 19 OHIO ST. J. ONDISP RESOL. 709, 722 (2004).22. The Administrative Dispute Resolution Act of 1996, Pub. L.No. 104-320, 5 U.S.C. §575.23. Thomas C. Louthan, How to Handle a Tax controversy at theRestructured IRS and in Court, SG063 A.L.I.-A.B.A. 245 (2002).Journal of Consumer & Commercial Law 129