Hoping to resolve matters that were unsuccessful on appeal, the Internal Revenue Service (IRS) launched a new pilot project through its independent Office of Appeals.
What is PAM?
The post-appeals mediation program (PAM) is not new. PAM operates under the Independent Office of Appeals, known as Appeals. The office does not handle tax enforcement or assessments. It works solely on tax controversies, under regulations aimed at keeping the office independent and free from collusion with other units of the IRS. Taxpayers can request PAM following an unsuccessful appeal of a tax dispute or an IRS audit issue.
Appeals assists taxpayers with tax disputes in order to find an acceptable forward course and solution through mediation, a type of alternative dispute resolution (ADR). With a typical PAM case, an appeals officer who is a trained mediator, works with the taxpayer and the IRS representative assigned to that case. The taxpayer can also invite a co-mediator at their expense to attend the medication.
There are good reasons to consider PAM if you have been unable to find agreement with the IRS. Mediation with PAM is voluntary and nonbinding. You are not required to agree to anything. Given the time and expense of protracted litigation, PAM may be able to help you reach a reasonable resolution without the risk and cost of an eventual unfavorable legal outcome.
The PAM process could be a good choice if you are already working with the IRS on a legal or factual problem, are involved in a tax audit or have appealed and are looking to quickly resolve a straightforward dispute for which you have already provided supporting resource material to the IRS.
There are situations that are not appropriate for PAM, a few of which include:
- matters involving offers in compromise
- collection matters
- cases already in litigation or scheduled to be litigated
What is new about the pilot program?
The new pilot program builds on feedback provided to the PAM program. John Hinding, acting chief of appeals at the IRS said, “Appeals is committed to offering alternative dispute resolution programs as a cost-effective option for resolving cases, improving the taxpayer’s experience, and making the best use of IRS resources.”
With the two-year pilot program, PAM cases will be assigned to an Appeals team that has no connection with the earlier appeal brought by the taxpayer. While the same information is presented during a mediation that was provided during an appeal, the Appeals personnel involved with the PAM proceeding will have a new perspective on the dispute which may facilitate resolution of the case.
PAM is not a venue to introduce new information or try to delay further action on your case by the IRS. Like most mediations entered in good faith, it could help you resolve a problem without further delay and cost. Bottom line, if you have a significant problem with the IRS, speak with an experienced tax attorney at the outset of the dispute to set your best course for success.
Received an IRS audit letter? We can help
From receiving an audit notice to exploring ADR options and tax litigation, our tax lawyers are here to provide experienced advice and strategic representation. Reach out to us at 440-250-9709 or schedule a consultation. We serve both domestic and international clients, with offices in Cleveland and Chicago ready to support you in resolving your tax matters efficiently.
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