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IRS's Fast Track Settlement Program

Anyone who has ever been audited by the IRS knows that the process can be a long and frustrating series of document requests, meetings, and waiting. The Fast Track Settlement Program, initiated in certain locations as a pilot program by the IRS in early 2011, is now available to all taxpayers who meet the program's requirements. Participation in the program does not waive any traditional appeal rights.

The program is administered by the IRS's Small Business and Self-Employed division (SBSE), and it allows taxpayers a "quicker" way to resolve issues that arise during an audit. In fact, the process is designed to be completed sixty days after the taxpayer is accepted into the program. Though sixty days (two months!!) may seem like a long time, resolution can often take up to a year for taxpayers who pursue the traditional IRS appeals procedures.

To participate in the program, the taxpayer's tax returns must be under examination by the SBSE group (as opposed to the Large Business and International or Tax Exempt and Government Entities groups). Additionally, there must a limited number of "fully developed" issues that can be addressed and resolved within the sixty day time frame. There is no limitation on how much money must be at issue.

The program is not available in limited circumstances, including correspondence examinations, cases where the taxpayer has not submitted any documentation to the IRS, TEFRA partnership cases, issues designated for litigation by the Office of Chief Counsel, and issues "not consistent with sound tax administration." All issues must be eligible for the program in order for the case to be accepted.

To apply, the taxpayer must submit a concise and complete position letter in response to the IRS's change report. The taxpayer, examiner, and examiner's manager should hold a managerial conference before the taxpayer applies for the program, and agree on as many facts and circumstances as possible before presenting the issues in the application. The taxpayer and examiner must also jointly complete Form 14017, Application for Fast Track Settlement.

If accepted into the program, both the taxpayer's and the IRS's position will be considered and a decision will be issued by an appeals officer within an expedited time frame. The decision to reject an application to the program is not appealable.

Additional information about the program can be found in IRS Publication 5022.

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