How to Use the IRS Fast Track Settlement Program for Small Businesses

How to Use the IRS Fast Track Settlement Program for Small Businesses

Fast Track Settlement (FTS) is an IRS program designed to resolve tax disputes within 60 days with the help of a trained mediator. Small businesses and self-employed taxpayers can used this program to quickly and efficiently resolve tax disputes, while still retaining all of their other appeal rights.

Before using FTS, a taxpayer must attempt to resolve all issues with the IRS auditor and their supervisor. If no agreement can be reached, then the taxpayer can use form 14017, along with a written statement of her  position on the disputed issue, to apply for the program.

There are several advantages to FTS, when compared to appeals within the IRS or filing a petition in Tax Court:

  • quicker resolution
  • simple one-page application without the need for a formal protest
  • Costs are lower than litigation in Tax Court
  • retention of all appeal rights

The FTS program is typically initiated before the IRS issues a 30-day letter notifying the taxpayer of their appeal rights. FTS cannot be used after the 90-day Notice of Deficiency letter has been sent to the taxpayer.

The case will be mediated by an IRS Appeals officer trained to resolve the issues between the IRS and taxpayer using dispute resolution techniques. The FTS Appeals Officer can propose settlement terms, or consider settlement terms proposed by either party. Each side will be asked to consider the hazards of litigation, including the costs of going to Tax Court and the potential weaknesses in their case that could result in an adverse court ruling.

The mediator does not have the authority to require either party to accept any settlement terms. The goal of FTS is to reach a mutually satisfactory solution in an efficient manner. The IRS claims that in some cases, FTS can decide issues in a day that would take months or years to resolve through the appeals process.

If the parties cannot come to a resolution, either side is free to end the mediation at any time. The taxpayer retains their appeals rights. At the conclusion of an unsuccessful FTS Session the taxpayer will be issued a 30-day letter stating their right to appeal within the IRS. The taxpayer also retains the right to file a petition in Tax Court, either instead of or after the IRS appeals conference.

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