New Post Appeals Mediation Pilot Program

On October 1, 2025, the IRS Independent Office of Appeals launched a two-year pilot program to make Post Appeals Mediation (PAM) more attractive and accessible to taxpayers. See IRS Announcement 2025-10. The new PAM pilot program offers taxpayers the opportunity to be assigned to a new Appeals team, which is otherwise unconnected to the underlying case, who will represent the original Appeals team in the mediation session. The assignment of the new Appeals team does not begin a new appeals process but rather is intended to help facilitate an expedited and impartial look at the underlying case with the goal of further exploring all potential paths to resolution prior to litigation.

All other aspects of PAM remain the same. The PAM program allows a taxpayer and Appeals to resolve disputes through mediation while a taxpayer’s case is still under consideration by Appeals. Rev. Proc. 2014-63, 2014-53 I.R.B. 1014. Both the taxpayer and Appeals must agree to mediation, which is non-binding. The taxpayer and the Appeals officer must first attempt to resolve all issues before seeking the services of an Appeals mediator. PAM may be used only after Appeals settlement discussions are unsuccessful and generally when all other issues are resolved but for the issue(s) for which mediation is being requested. PAM is available to all taxpayers who have non-docketed cases before Appeals. See IRS Announcement 2025-6.

While the new PAM pilot program makes only a small structural change to the PAM program, it signals an increased emphasis by the IRS that taxpayers should make use of the available ADR programs. The new PAM pilot comes on the heels of IRS guidance issued in June 2025 emphasizing the availability and benefit of its various settlement initiatives, including PAM and Fast-Track, intended to expedite the resolution process and resolve disputes prior to the onerous and costly litigation process. See IRS Announcement 2025-06. To that end, the IRS has put in place requirements that it must follow to ensure accessibility to these settlement programs including taking additional steps prior to denying a taxpayer request for PAM or Fast Track Settlement, approval of a first-line executive at the IRS prior to a denial, and guaranteeing that a taxpayer will receive an explanation should the request be denied.

The success of the new PAM pilot program will depend in large part on the taxpayers’ experience with the newly assigned Appeals teams and whether their “fresh look” at the issues before them addresses taxpayer concerns related to impartiality and offers both parties a meaningful opportunity for resolution prior to litigation. Much will depend on how integrated the specialists and exam team are in the mediation process and the risk that the new Appeals team may simply defer to the original Appeals team thereby hindering the efficacy of the new PAM pilot program and leaving taxpayers and the IRS in the same settlement deadlock.

PAM Practice Tips:

• • • Selecting a Mediator: PAM allows the taxpayer to select an independent, non-IRS mediator to serve as a co-mediator with the IRS Appeals Mediator. We recommend always selecting an independent, non-IRS mediator to serve as a co-mediator with the IRS Appeals Mediator. Selecting a good independent mediator can go a long way in moving the parties toward settlement.  
    • Preparing for PAM: We recommend that clients establish an understanding of the IRS’s position and arguments before PAM begins and clarify points of confusion in any pre-PAM mediation submissions. Making sure that both parties understand each other’s positions and arguments is crucial to efficiently using the time allotted for the PAM session.  
    • PAM Submissions: Use PAM submissions in the most effective way for your case. In some cases, these may be advocacy pieces directed at the mediators to help them to understand your case. Providing context to the issues in dispute will be even more important if the Appeals Team is new to the case. In other instances, submissions may be directed at the IRS and aimed at finding common ground or clarifying areas of confusion.