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Mediation is a dispute resolution process in which the mediator facilitates negotiations between the parties to help them reach a mutually acceptable settlement. The major distinction of mediation is that a mediator does not make decisions about the outcome of the case. Instead, the parties, with the assistance of the mediator, work toward a resolution of the controversy to which both parties can agree.

The mediator will ask questions, reframe issues, assist the parties to understand each other, and help identify solutions. Mediators do not take sides, pass down decisions, offer legal advice or reveal confidences.

Mediation is voluntary for all parties. The process is nonbinding, meaning each party retains 100% control over whether or not to settle the controversy. No one, including the mediator, can force either party to do something they don't agree to do. And any party, including the mediator, can terminate the mediation at any time.

Participants are expected to adhere to the following principles when in mediation:

• Decision-makers must be present at the mediation;
• Everyone will be honest and courteous;
• Participants must try to understand, but not necessarily agree with, the other party's concerns; and
• Participants must be open to new ideas for resolution.

An important goal in preparing for mediation is to enter the process confident enough in one's own understanding of the situation to be open to other participants' points of view and any options that arise in the course of the mediation process.

Parties should also give consideration to what will happen if the case does not settle. Taxpayers retain the right to protest an Audit Assessment if they disagree with it, but what are the costs associated with that? And success is never a guarantee in another venue for either party.

Cases are resolved in mediation only if the parties can agree to an outcome. Since all parties come to a mediation with the power to walk away at any stage of the process, we encourage participants not to come to the mediation with a predetermined "bottom line." While it is understood that there will be factors that will limit all participants' flexibility, establishing absolute boundaries in advance could limit your success in the mediation.

Confidentiality is key when it comes to mediation. Mediation communications are privileged under N.J.S.A. 2A:23C-4 and confidential under N.J.S.A. 2A:23C-8.

Communications from the mediation process are protected as follows:

• Communications (e.g., settlement discussions, offers, and admissions) are private and cannot be used in discussions with the Conference and Appeals Branch or as evidence in Tax Court.
• The mediator's notes and communications are not subject to subpoena or public disclosure (e.g., New Jersey Open Public Records Act (OPRA)).

While confidentiality is broad, common exceptions include:

• A written and signed closing agreement resulting from the mediation.
• Communications indicating criminal intent, threats of bodily harm, or ongoing or future criminal acts.
• Waiver by the parties involved.

When you enter mediation, you will be asked to sign a Mediation Agreement (Form NJ-MED-2) that affirms you understand and accept the rules of confidentiality.

Your auditor will advise you of the option for mediation at your post audit conference.

They will provide instructions and addresses for submission. However, you will need to submit:

• Form NJ-MED-1* (Application for Mediation) ; and
• A signed statute of limitations consent (if within 210 days of expiration); and
• Form NJ-MED-2* (Mediation Agreement)

After you apply, you will receive written notice stating whether your application is accepted or rejected.

• If accepted, the notice will include the name of your assigned mediator and information about your first session.
• If rejected, you will receive an explanation of why your case was not accepted. The case will be returned to the Division's Audit Branch where the audit will be finalized. However, applying for mediation does not affect your right to protest an Audit Assessment if you disagree with its findings.

* Reference Only versions are online for informational purposes only. All relevant material will be provided to eligible taxpayers at the post-audit conference.

For more information on the New Jersey Mediation Pilot Program, see Mediation Agreement, TB-115 and Mediation Pilot Program Frequently Asked Questions.

Information and instructions for entering mediation will be provided at the post-audit conference. However, reference copies of the forms are available for informational purposes only:

• Form NJ-MED-1
• Form NJ-MED-2

Mediation applicants must review both the New Jersey Rule of Evidence 408 and the Uniform Mediation Act before submitting the application.

Applications will be submitted by email at NJTaxation.Mediation@treas.nj.gov and must contain the mediation forms and consent to extend the statute of limitations (if within 210 days of expiration), all of which will be provided in your post-audit conference.