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Cardozo Journal of Conflict Resolution

Abstract

As Alternative Dispute Resolution (ADR) attains greater acceptance in the American legal landscape, government sponsored ADR programs will grow in size, number, and significance. The Internal Revenue Service (IRS) provides a primary example of a governmental body experimenting and obtaining modestly successful results through the use of various dispute resolution mechanisms along the ADR spectrum. The purpose of this Note is to examine the types of ADR processes being implemented by the IRS, focusing specifically on how the IRS has pioneered each program by combining the unique exigencies of sound tax administration with the principles of negotiation, mediation, and arbitration.

Part II will provide the backdrop from which the IRS began introducing its pilot ADR programs. The discussions in Parts III, IV, and V of this Note will evaluate the strengths and weaknesses of the various ADR mechanisms employed by the IRS. Part III will explore the process of negotiation that occurs between the taxpayer and the IRS Appeals Office, illustrating how negotiation provides an adequate beginning to the settlement story. Part IV will address several IRS mediation programs. The tempered optimism surrounding the success of those programs is the primary focus of this Note. Although the IRS mediation programs are certainly flawed, they represent a major step in the development of ADR as a viable taxpayer dispute resolution tool. Two programs in particular, post-appeals mediation and Fast-Track Settlement, represent a new paradigm through which to approach the challenges of resolving taxpayer disputes in an efficient and equitable manner. While these mediation programs are relatively new and underutilized, with an increase in taxpayer awareness and education regarding the merits of ADR, mediation should bloom into the staple and preferred conflict resolution mechanism for IRS tax disputes. Part V will touch upon the IRS' use of arbitration as a final resort to effectuate a conclusion to the dispute before commencing traditional litigation. Additionally, this Note will discuss and suggest possible changes to the IRS' ADR scheme that may enhance efficiency, fairness, and overall confidence and satisfaction in the programs for both the IRS and the taxpayer.

Disciplines

Dispute Resolution and Arbitration | Law | Taxation-Federal

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