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Policy For Tax Litigation

U.S. Department of Justice

Tax Division

Assistant Attorney General Washington, D.C. 20530

                September 11, 1995


TO: All Civil Attorneys

      Tax Division

FROM: Loretta C. Argrett

      Assistant Attorney General

SUBJECT: Alternative Dispute Resolution

      Policy for Tax Litigation

    On April 6, 1995, the Attorney General signed an order promoting broader use of Alternative Dispute Resolution as a tool for resolving disputes between the government and its citizens in as prompt, efficient, and inexpensive a manner as possible. Alternative Dispute Resolution ("ADR") is any non-binding dispute resolution process facilitated by a third-party neutral. ADR methods include, but are not limited to, arbitration, mediation, early neutral evaluation, neutral expert evaluation, mini-trials, and summary jury trials. ADR may be conducted pursuant to the agreement of the litigants, or it may be court-mandated.

    The Tax Division always has had, and continues to have, a policy of settling cases, where appropriate, as early in the litigation as reasonably possible. I believe that the use of ADR will further this Division policy. Therefore, Tax Division attorneys are expected to use ADR in appropriate cases and to cooperate with and support court-annexed or court-sponsored ADR programs.

    Tax Division lawyers should consider the use of ADR in all civil cases within the Division in a manner consistent with our enforcement objectives and the need for consistent treatment of similarly situated taxpayers. In cases where the attorney assigned to the case, in consultation with his or her reviewer, believes that ADR may be appropriate, he or she should consider using an independent third-party neutral through a court-sponsored program, from another government agency, or from outside of the government. Where court-sponsored and/or court-annexed ADR programs are available, Division attorneys are expected to utilize and participate fully in such programs in all appropriate cases.


The Tax Division has a strong record of resolving disputes through settlements achieved through traditional negotiation between counsel. I expect that all attorneys in the Division will continue to use their negotiation skills to settle cases where settlement is appropriate. ADR is not a substitute for traditional negotiation, but rather provides attorneys with additional tools to facilitate settlement of cases on an appropriate basis at the earliest stage at which such a settlement reasonably can be reached. Knowing how and when to settle a case is as important as knowing how to try a case. ADR processes can be important tools in the prompt and fair resolution of tax disputes and the skilled use of negotiation and ADR processes is part of the responsibility of every attorney in the Division. To facilitate the greater use of ADR, as well as to improve attorneys' negotiating skills in general, all Division attorneys will be required to participate in comprehensive and continuing training in both negotiation and ADR.

    It is the policy of the Tax Division, in making promotions and giving awards and other professional recognition, to recognize the outstanding contributions of trial attorneys in skillfully negotiating settlements as well as in trying cases. Thus, skillful use of ADR will likewise be considered in evaluating attorneys and recognizing their contributions to the Division.

    Attached is a set of case selection criteria to be used by the Civil Trial Sections, Court of Federal Claims Section, Appellate Section, and Office of Review in evaluating whether and when ADR is appropriate in a particular case.


Updated April 6, 2015

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