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1997 J. Disp. Resol. 215 (1997)
Alternative Dispute Resolution in the Federal Tax Arena: The Internal Revenue Service Opens Its Doors to Mediation

handle is hein.journals/jdisres1997 and id is 221 raw text is: COMMENT Alternative Dispute Resolution in the Federal Tax Arena: The Internal Revenue Service Opens Its Doors to Mediation I. INTRODUCTION Within the last few decades, it has become apparent that feelings among Americans concerning our legal system have sunk to a state of dissatisfaction. The causes of this dissatisfaction are numerous, but the most prevalent are: high litigation costs, extensive discovery procedures bordering on invasion of privacy, the time consumption for case preparation, and unsatisfactory results.1 In response to this dissatisfaction, a number of federal agencies have begun to employ various methods of alternative dispute resolution (ADR) to facilitate timely and cost- effective settlements which are satisfactory to all parties.2 The enactment of the Administrative Dispute Resolution Act of 19963 has enhanced the recent trend toward the implementation of ADR procedures.' The Internal Revenue Service (IRS), however, has been slow in its application of ADR techniques. This reluctance is primarily due to the success of its Appeals Division (Appeals) in settling taxpayer disputes. In effect, Appeals operates as an alternative dispute resolution forum within the IRS because the process allows taxpayers to contest a proposed tax adjustment through face-to-face settlement conferences with an IRS Appeals officer.5 This approach has produced an 85 to 90 percent success rate for settling disputed cases.6 Despite this success rate, the IRS has determined that the process could be improved by other, more narrow procedures that target specific types of tax disputes. In response to this determination, the IRS established several programs with a primary intent of producing more efficient resolutions The most recent of these programs is the new 1. John F. Murray, Mediation of Tax Controversies: Getting to 'Yes, 96 TAX NOTES TODAY 32-22 (1996). 2. Steven C. Wrappe, The IRS Expands Use of Alternative Dispute Resolution, 95 TAX NOTES TODAY 91-86 (1995). 3. 5 U.S.C. §§ 571-583 (1996); see also Thomas Caner Louthan & Steven C. Wrappe, Building a Better Resolution: Adapting IRS Procedures to Fit the Dispute, 96 TAX NOTES INT'L 91-86 (1996). The Act requires each agency to develop a policy for implementing ADR procedures in its administrative programs and in doing so, the agency is given broad discretion regarding the procedures of dispute resolution methods. Id. 4. Wrappe, supra note 2. 5. Id. 6. Louthan & Wrappe, supra note 3. 7. Id. 8. Id.

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