The IRS Independent Office of Appeals announced a two-year pilot program starting October 1, 2025, intended to test changes to Post Appeals Mediation (PAM) for taxpayers with unresolved disputes. The program introduces a key structural change: cases will now be reassigned to Appeals teams with no prior connection to the underlying dispute, potentially increasing impartiality in the mediation process.

“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,” said John Hinding, Acting Chief of Appeals. According to the IRS, the reassignment aims to provide taxpayers with a fresh perspective on their cases while maintaining the expedited nature of the mediation process.

The IRS noted that the pilot program is designed to address impartiality concerns in mediation while preserving the voluntary nature of the settlement process.

Post Appeals Mediation serves as a final attempt to resolve tax controversies before potential litigation. Taxpayers can request PAM only after unsuccessful resolution attempts with their initial Appeals officer, and the process typically involves a one-day mediation session facilitated by an independent mediator.

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How the Pilot Program Changes the Process

Under the new pilot structure, PAM cases will be handled by Appeals teams completely unconnected to the original case. This represents a departure from previous procedures and is intended to enhance taxpayer confidence in the impartiality of the mediation process.

Michael Baillif, Director of the ADR Program Management Office, noted that “PAM proceedings typically have a high level of success, but we are always working with taxpayers, practitioners, and stakeholders to see how to adjust our ADR programs in ways that make participation more accessible and useful for taxpayers.”

The mediation sessions remain voluntary, with neither party able to impose an outcome. Taxpayers retain full control over whether to accept any proposed settlement, and decisions made during mediation are entirely at the discretion of the parties involved.

Potential Implications for Business Owners and High Earners

The IRS stated that the pilot program is expected to address complex disputes, which are more common among business owners and high-income professionals. The reassignment to uninvolved case teams is designed to provide a more objective review of cases, with the agency noting it may increase taxpayer confidence in the outcomes.

The IRS maintains five Alternative Dispute Resolution programs, including Fast Track Settlement, Fast Track Mediation Collection, Post Appeals, Mediation (PAM), Rapid Appeals Process, and Early Referral. These programs are designed to resolve tax controversies more efficiently than traditional litigation.

Recent IRS guidance has also clarified PAM procedures through updates to the Internal Revenue Manual, reinforcing internal controls and formalizing processes for mediation requests and approvals. The typical timeframe for PAM resolution is 60–90 days following acceptance.

The pilot program runs from October 1, 2025, through September 30, 2027, during which the IRS will evaluate its effectiveness in improving taxpayer experience and case resolution rates. Taxpayers interested in learning more about the PAM pilot can contact the ADR Program Management Office at ap.adr.programs@irs.gov.

Source: IRS Independent Office of Appeals starts Post Appeals Mediation pilot program (IR-2025-100)