Massachusetts – Early Mediation Program for Tax Disputes

SALT Report 2003 – In an effort to resolve tax disputes in an expedited manner, the Massachusetts Department of Revenue has implemented the Early Mediation Program. The program expands the dispute resolution options available to taxpayers and, in certain cases, will minimize time-consuming and expensive legal proceedings.

Participation in the mediation program is optional for both the Department and the taxpayer.  If a taxpayer chooses to participate in the program it will not eliminate any existing administrative appeal options. These options include the opportunity to request a pre-assessment conference, a post-assessment abatement hearing, or a settlement consideration with the Office of Appeals if the taxpayer’s case is not resolved through the early mediation process.

A request to participate in the Early Mediation program can be initiated by either the taxpayer or an Audit manager. If it is determined that a case is appropriate for Early Mediation by the Audit Division, an Audit Manager will discuss the following issues and case details with the taxpayer:

  • Suitability of issues for the Early Mediation process,
  • Willingness of both parties to consider alternative resolution options,
  • Adequacy of issue and factual development, and
  • The ability of both parties to devote resources to the mediation process

Once the participants agree to the terms of the Early Mediation program, both the taxpayer and the Audit Manager must submit a joint Application for Early Mediation Program to the Office of Appeals.  The joint application should include statements of the facts and issues in dispute from both the taxpayer and the Audit Division.  In addition to the Application, the taxpayer will be required to complete and sign a Consent Extending the Time for Assessment of Taxes (Form A-37).

The goal of the mediation sessions is for both parties to reach a mutually agreeable resolution on their own, but if they are unable to do so, the mediator may make settlement recommendations. If the parties do reach a settlement agreement, the parties will sign the Early Mediation Session Report detailing the agreed upon terms.  Once signed, the settlement agreement will be entered into under the authority of G.L. c. 62C, § 37C.

For Further Information:

Massachusetts Department of Revenue – Administrative Procedure 635