A primary objective of the Internal Revenue Service (IRS) is to resolve tax controversies at the lowest level without sacrificing the quality and integrity of those determinations. Alternative Dispute Resolution (ADR) programs achieve this objective. The Rapid Appeals Process (RAP) is one such ADR process.

The goals and process time frames in RAP provide taxpayers more timely resolution of their tax dispute.

RAP takes place while the case is in Appeals’ jurisdiction.

RAP is designed to be completed in one conference.

Appeals' mission is to resolve tax controversies, without litigation, on a basis which is fair and impartial to both the Government and the taxpayer in a manner that will enhance voluntary compliance and public confidence in the integrity and efficiency of the Service. Appeals' vision is to promote an independent and innovative environment that drives quality and timely resolution of tax disputes by empowering a highly skilled, motivated, and cohesive workforce.

The Rapid Appeals Process is a tool used to improve the efficiency and timeliness of Appeals resolutions. If all parties agree, the pre-conference becomes a working conference where Appeals utilizes mediation techniques to resolve unagreed issues. If the process is unsuccessful, the traditional Appeals process continues.

RAP is available to taxpayers who appealed:

During the RAP session, previous resolution discussions between the taxpayer and Exam should be presented to the ATCL/Appeals Officer (AO) for consideration. However, Appeals will make an independent evaluation of the hazards and will not execute a settlement if it does not fall within such evaluation or established settlement guidelines for the issue.

If the ATCL/AO does not accept a settlement proposed between the taxpayer and Exam, he/she will explain why it is not acceptable to both parties.

There are differences between the RAP and FTS processes:

Considering factual and legal issues in RAP allows the parties to consider hazards regarding what facts, if any, a court will accept and hazards regarding the merits of different possible legal interpretations of law in resolving disputes.

RAP does not create any special authority for settlement by (non-ATCL) Appeals Officers.

RAP takes place while the case is in Appeals' jurisdiction and is designed to be completed in one conference.

Appeals manages and administers the RAP program.

RAP enables taxpayers and Exam to work together to expedite the resolution of unagreed issues in Appeals.

RAP provides an opportunity for Exam and taxpayers to resolve their disputes with an ATCL/AO. The ATCL/AO uses mediation skills and techniques to focus the issues and guide Exam and the taxpayer to self-determine the outcome of the dispute. The ATCL uses his/her settlement authority to facilitate resolution. The ATCL Team Manager (ATCLTM) will sign Form 5402 to confirm that the ATCLTM has no proposed changes to the settlement. For non-ATCL cases, the AO’s settlement is subject to managerial review and approval.

RAP is designed to:

RAP presumes the unagreed issue is fully developed and ready for immediate consideration and resolution and that Exam and the taxpayer have already articulated their specific points of disagreement of the issue. An issue cannot be fully developed prior to the receipt of all necessary referrals, technical advice, Counsel advice, valuation reports, or other relevant documentation.

If at any point the ATCL/AO determines that the RAP process is not facilitating the resolution of the unagreed issue, the RAP process is terminated, and the ATCL/AO continues consideration of the issue(s) using the traditional Appeals process.

RAP is elective. Both the taxpayer and Exam must agree to participate in the process and either party can withdraw from the process at any time.

RAP does not eliminate or replace existing dispute resolution options, including the opportunity for consideration under the traditional process.

Four Elements of RAP:

RAP is available for all LB&I (except IIC) cases, including those with issues listed below:

RAP is available for all E&G cases.

RAP is not available for the following:

After assignment of the case, if all parties agree to the RAP process, the ATCL/AO contacts the taxpayer and the Exam Team Manager to start the RAP planning process and sends Letter 5248, Introduction to Rapid Appeals Process. The ATCL/AO documents completion of the actions in the case activity record.

To ensure the taxpayer and Exam have a basic understanding of RAP, the ATCL/AO contacts both parties to explain the process and benefits, outlines a plan to ensure that the taxpayer and Exam understand the expectations for the working conference, and schedules a mutually agreeable conference date.

The ATCL/AO identifies and discusses the need to limit the number of participants in the RAP session.

Where an issue is coordinated, the ATCL/AO follows the procedures in IRM 8.7.3.2, Coordinated and Appeals Emerging Issues.

All three parties - Exam, the taxpayer, and Appeals - are active participants in the RAP process.

The taxpayer's "decision-makers" are encouraged to participate.

The taxpayers are encouraged to bring their experts into the process.

Exam participants include the Team Manager, Revenue Agents and others who have the knowledge and expertise to contribute to issue resolution.

The Exam Team Manager, in consultation with the assigned ATCL/AO determines the Exam participants.

Exam participants also include Technical Specialists. In those instances where the issues are industry specific or there is a Technical Specialist position established for the issue, the participation of appropriate Technical Specialists is strongly recommended.

Upon offering RAP, the ATCL/AO assigned the case will input Action Code RI in CARATS on the date the offer is made; the ATCL/AO will input Sub-action Code RIA to show the date RAP is accepted or Sub-action Code RIR to show the date RAP is rejected.

If RAP is rejected, the ATCL/AO will input Action Code RO and the appropriate Sub-action Code to indicate by whom:

If RAP is accepted, the ATCL/AO will input Action Code RE and the appropriate Sub-action Code to indicate the disposition:

The system will automatically update the RP Feature Code when the Action Code RI is input.

The system will allow multiple uses of the codes to capture by issue.

The system will not allow input of the Action Code AC-FR if the case has Action Code RI without Action Code RO or RE as appropriate. A system message will appear to inform that either RO or RE must be input as applicable.

In RAP, the ATCL/AO is acting as a mediator in addition to his/her traditional role. RAP works best when the taxpayer/representative signs a waiver for the term of the session to allow ex parte communications between the ATCL/AO and Exam as provided by section 1001(a)(4) of the Internal Revenue Service Restructuring and Reform Act of 1998. Use Form 14525, Waiver of Restrictions on Ex Parte Communications in Rapid Appeals Process, for this purpose. Limitations to the waiver may be appropriate in full consultation with the taxpayer.

If RAP is unsuccessful -

Planning begins when the ATCL/AO, Exam and taxpayer agree to participate in a RAP session.

Feature Code RP will be input by the ATCL/AO when the parties agree to participate in RAP.

When conducting the RAP session, the ATCL/AO will provide an agenda. The agenda guides the conference meetings, sets the order of issue discussion, and includes questions to clarify each issue.

The ATCL/AO provides the Schedule of Adjustments to all participants early in the process, and updates it as the session progresses.

The RAP session is led by Appeals, but all three parties are active participants.

RAP employs various alternative dispute resolution techniques to propose solutions.

Using mediation techniques, Appeals uses an interest-based approach to bring the parties to a mutual resolution of the issues during the session.

After an initial joint session, Appeals may conduct the entire RAP session jointly, or meet with the parties separately (subject to the provision of a satisfactory ex-parte waiver).