IRS Alternative Dispute Resolution: Your Options

Disagreeing with the IRS does not always mean choosing between accepting its position and going to court. In the right case, Alternative Dispute Resolution, often called ADR, can create a structured opportunity to discuss an unresolved issue with help from the IRS Independent Office of Appeals. The process is designed to help the parties communicate, identify the real point of disagreement, and explore whether a resolution is possible.

ADR is not one program and it is not a shortcut around the tax system. The procedure that may fit depends on the kind of dispute, whether the case is still with Examination or Collection, whether it has reached Appeals, how developed the disputed issue is, and which response dates are running. This guide explains the main paths and the practical questions that should be answered before asking for mediation.

What IRS alternative dispute resolution means

The IRS describes mediation as informal, confidential, voluntary, and nonbinding. An Appeals mediator helps the taxpayer and the assigned IRS employee communicate, identify barriers to settlement, and consider possible terms. The mediator does not decide who is right, erase a balance, or force either side to agree. If mediation does not resolve the issue, the normal administrative process generally continues.

That distinction is important. ADR can be useful when both sides have already developed their positions and want to resolve a specific dispute. It is not the place to introduce a brand-new issue, wait until the last minute to gather records, or use discussion as a reason to miss an appeal or court deadline. The IRS explains these limits in its Appeals mediation guidance.

Fast Track Settlement for examination disputes

Fast Track Settlement is intended for disputes that arise while an examination is still under Examination jurisdiction. It brings in an Appeals mediator earlier, after the taxpayer and examiner have developed the unresolved factual or legal issues. For qualifying small business, self-employed, and individual cases, the IRS says its goal is to resolve accepted cases within 60 days. Its goal for qualifying Large Business and International cases is 120 days.

Fast Track can be valuable because it may create a focused settlement discussion before a case proceeds through a traditional appeal. It does not guarantee a reduction or require either party to settle. If it does not work, the taxpayer may still have the normal opportunity to request an appeal or an IRS manager conference, subject to the applicable rules and deadlines. The IRS Fast Track overview identifies Form 14017 as the application used for many examination cases.

Fast Track Mediation for collection cases

Mediation is not limited to audits. Fast Track Mediation, Collection may be available for certain collection disputes involving an Offer in Compromise or a Trust Fund Recovery Penalty. Collection generally keeps jurisdiction while an Appeals mediator facilitates the discussion. The IRS states a goal of resolving accepted collection Fast Track cases within about 40 days.

The key word is eligible. A rejected offer or a difficult collection matter does not automatically qualify. The issue, procedural stage, and program requirements control. If a collection notice is involved, first identify the notice, tax periods, balance, filing status, and deadline. The site’s Offer in Compromise guide and payment-plan guidance can help clarify the underlying collection questions before a mediation path is considered.

Early Referral, Rapid Appeals, and Post-Appeals Mediation

Early Referral can be useful when one developed, unagreed issue is holding up a larger examination or collection case. It may allow that issue to move to Appeals while the IRS continues working on the remaining matters. The request is made in writing to the case or group manager, and the IRS says there is no user fee. It is a procedural option, not a substitute for having the facts and position ready.

The Rapid Appeals Process, or RAP, may be available in qualifying cases already in Appeals. It turns the usual preconference and opening-conference activity into a working session where the taxpayer, Examination, and Appeals focus on unresolved issues and litigation risks. The IRS notes that the appeal continues under the traditional process if RAP does not resolve the dispute.

Post-Appeals Mediation may be considered after substantial Appeals work when issues remain unresolved. The IRS began a two-year PAM pilot on October 1, 2025, using an Appeals team unconnected with the underlying proceeding for the mediation session. PAM is not a new appeal and it is not available for every matter, but it can provide one more structured settlement opportunity before litigation in an eligible case.

Deadlines and preparation come first

A well-founded dispute can still lose an important option if the response date is missed. Read the notice in front of you carefully. Some collection due process notices generally allow 30 days to request a hearing, while a statutory notice of deficiency generally allows 90 days to petition the United States Tax Court. The correct deadline and remedy depend on the letter, the taxpayer’s procedural position, and the facts of the case.

If a taxpayer is requesting a traditional appeal, the IRS says the written request generally goes to the IRS office that issued the letter containing appeal rights, not directly to Appeals. Sending it to the wrong place can delay the process. The IRS appeal-request guidance explains that sequence. Mediation discussions should never distract from preserving a protest, hearing, or court deadline.

How to decide whether ADR is worth exploring

Start with four questions: What exactly is disputed? Which IRS office currently controls the case? Are the relevant records and legal positions developed? Which response dates or appeal rights need protection now? ADR tends to be more useful when the disagreement is clear and the taxpayer can explain the supporting facts, rather than when the file is still missing basic returns, payment records, financial information, or a defined position.

Gather the notices, tax periods, assessment history, payment records, filed and unfiled return information, prior agreements, correspondence, financial records, and documents supporting the disputed issue. If the issue involves an active levy, lien, or collection notice, keep that paperwork separate and address the immediate collection deadline first. The tax debt resources page can help organize the first set of records.

How MBA Financial Tax & Accounting can help

MBA Financial Tax & Accounting begins with a confidential investigation of the IRS account, notices, filings, balance history, current collection stage, financial facts, and deadlines. That fact-first review helps separate an issue that may call for an appeal or mediation discussion from one that first needs filing work, payment analysis, hardship documentation, or a response to an active collection action.

The firm does not promise that any one IRS program will fit every case. Where appropriate, the investigation can clarify whether a taxpayer should explore Appeals, an ADR procedure, payment planning, penalty relief, an Offer in Compromise, or another path. The investigation can be paid in full for priority attention, through investigation installments, or through extended monthly arrangements for ongoing services when appropriate.