The alternative dispute resolution (ADR) programs used by the IRS for mediating tax issues between taxpayers and the agency can be faster and cheaper than the usual appeals process, but the use of the programs fell by two-thirds over the past decade, according to a new report from the Government Accountability Office (GAO).
The GAO report found usage of these programs fell by over 65% between fiscal years 2013 and 2022. The IRS used alternative dispute resolution programs to resolve disputes in less than half of 1% of all cases reviewed by its Independent Office of Appeals, which handles the tracking and implementation of all IRS ADR programs.
The GAO says the IRS is missing opportunities to use several management practices for its ADR programs to help increase taxpayers’ willingness to use ADR and to maximize the programs’ benefits. The GAO made eight recommendations to improve the management of ADR programs. See the report.