I don’t always advise my Richland County contacts to do this, but it just might be time to go to battle with the IRS.
If they’ve come to a decision regarding your tax debt that you don’t agree with, there’s more you can do besides waving the white flag, believe it or not.
And here’s the crazy part…
The IRS wants to help you do it.
They actually have an Alternative Dispute Resolution (ADR) program – a powerful program that most tax softwares and Columbia, SC professionals don’t talk about enough. That’s why I want to tell you about it today.
ADR is all about resolving tax controversies outside the traditional court system. Think of it as a negotiation table facilitated by a neutral third party. There are different ADR programs available at the IRS, each suited for different stages of your dispute and the complexity of your tax issue.
Here’s a quick rundown of what’s available:
- Early Referral: This is an option for resolving specific issues while your audit is still ongoing. It’s ideal for clear-cut disagreements that can be addressed separately from the broader examination.
- Fast Track: This involves a trained Appeals officer acting as a neutral mediator to help you and the IRS reach a common ground. This is a good option if you prefer a quicker resolution (within 40 days), and there are various options for both small and large businesses.
- Post-Appeals Mediation: If your appeals process hasn’t yielded a resolution, Post-Appeals Mediation brings in a new, jointly selected mediator to help you and the IRS reach an agreement.
- Binding Arbitration: Involves a neutral decision-maker who issues a binding verdict on the disputed issues. This is a more formal process than mediation but offers a faster resolution compared to litigation. It’s best suited for factual disagreements where an arbitrator’s expertise can be beneficial.
The IRS is actually working actively to make ADR more accessible and attractive to taxpayers. Recently, they created an Alternative Dispute Resolution Program Management Office (ADR PMO) specifically focused on improving these programs. (Imagine that, the government creating yet another office.)
Like I said, the IRS wants to help you get your disputes taken care of efficiently. By opting for a less messy settlement option, you can…
- Speed up the process. ADR cases are resolved significantly faster than traditional appeals, according to Accounting Today. If this tax dispute has already been sitting like a weight on your chest for a couple of months, you’re going to want to kick it as soon as possible.
- Cut down on the expenses. ADR translates to cost savings for both you and the IRS. Lower legal fees and reduced administrative costs mean more money in your pocket.
- Increase your chances of success. Studies by Accounting Today show that taxpayers who use ADR have a higher satisfaction rate – which might be exactly what you need at this point in your tax resolution process.
The bottom line? ADR can be a faster, cheaper, and less stressful way to resolve your tax controversy. To get started, you can request ADR directly from the IRS. To prepare for your ADR sessions, you’ll have to gather all the relevant documents, familiarize yourself with the process, and set realistic goals.
But… that’s a lot for one person to undertake. There’s a lot of thought to put into which ADR program will be the right option for you, and the number of different options can feel overwhelming.
So don’t forget, I am always here to guide you through the ADR process, prepare documentation, as well as help you manage your expectations. So give me a call when you’re ready to finally move on from your recent tax controversy.
Here to help you fight effectively,
Akuathayre Snell