4.51.4  LB&I/Appeals Fast Track Settlement Program (FTS)

Manual Transmittal

September 11, 2015


(1) This transmits revised IRM 4.51.4, LB&I Case Management, LB&I/Appeals Fast Track Settlement (FTS) Program.

Material Changes

(1) Corrected IMS input fields for FTS to reflect changes in IMS in IRM

(2) Removed paragraph (2) regarding specialized issue characteristics in IRM

(3) Removed IRM paragraph (1)(b) regarding cases for which a 30-day letter has been issued.

(4) Clarified FTS application submission procedures and modified the FTS email address and instructions, in IRM

(5) Clarified the application process and added the FTS email address and instructions in IRM, paragraphs (5) and (6).

(6) Clarified what is included in the FTS application package in IRM

(7) Added new IRM subsection on the status and aging reason codes for FTS cases.

(8) Clarified that the 120 day start date commences at the Appeals acceptance date in IRM

(9) Deleted IRM regarding FTS Application Package received directly in local Appeals office.

(10) Deleted "such as CCI/ACI issues, international issues or listed transactions" in IRM

(11) Moved paragraph (2) of IRM to IRM (5).

(12) Updated Delegation Order 97 citation to Delegation Order 8-3 in IRM

(13) Replaced "ACDS summary printout" with "a copy of the agreement form" and removed reference to LB&I FTS Program Manager in IRM

(14) Removed reference to on-site reviews in IRM

(15) Exhibit 4.51.4-1 is replaced with a new version.

(16) Exhibits 4.51.4-2 and 4.51.4-3 have been eliminated and replaced with hyperlinks to Forms 14000 and 14017.

(17) Exhibit 4.51.4-4 is renumbered as Exhibit 4.51.4-2 and is replaced with a new version.

(18) Various editing changes have been made to correct and clarify text.

Effect on Other Documents

This IRM supersedes IRM 4.51.4 dated January 1, 2007.


LB&I, Appeals, SB/SE, TE/GE

Effective Date


Tina Meaux
Director, Pre-Filing and Technical Guidance (PFTG)
Large Business and International Division  (09-11-2015)
Introduction to FTS Program

  1. A primary objective of the Service is to resolve tax differences at the lowest level without sacrificing the quality and integrity of the examination.

  2. Fast Track Settlement (FTS) was developed as an alternative dispute resolution process that furthers the Service's goal of resolving tax controversies fairly and impartially to both the government and the taxpayer in an expeditious manner.

  3. FTS improves business practices by addressing disputes as early as possible to expedite case closing and reduce taxpayer burden.

  4. The LB&I Pre-Filing and Technical Guidance (PFTG) Fast Track web page contains many tools and links designed to help LB&I personnel understand and participate in the process.  (01-01-2007)
Overview of FTS Program

  1. Rev. Proc. 2003–40 ,2003–1 C.B.1044 , formally established the FTS Program, with the goal of expediting case resolutions and expanding the range of dispute resolution options available to taxpayers.

  2. LB&I and the Office of Appeals jointly manage and administer the FTS Program.

  3. FTS provides LB&I and taxpayers an opportunity to resolve their disputes with an Appeals Official providing mediation skills and settlement authority.  (09-11-2015)
Program Objectives

  1. Fast Track Settlement will enable taxpayers and the IRS to work together to resolve outstanding issues while the case remains in LB&I jurisdiction.

  2. FTS program is designed to:

    1. Resolve examination issues at the lowest level

    2. Use Appeals tools in LB&I

    3. Decrease overall time from return filing to case closure

    4. Ensure process meets the needs of the LB&I population

    5. Reduce taxpayer burden with optimal use of Service resources.  (09-11-2015)
Collaborative Dispute Resolution Process

  1. FTS takes place while the case is in LB&I jurisdiction and is designed to be completed in approximately 120 days.

  2. LB&I, the taxpayer, and Appeals are active participants in the process, and all three must agree before a proposed resolution can be implemented.

  3. FTS uses mediation techniques to focus issues and lead LB&I and the taxpayer to self-determine the outcome of the dispute.

  4. When a resolution cannot be reached through mediation, Appeals may propose a resolution, but such proposal cannot be imposed on either party.

  5. If the Fast Track Settlement process is unsuccessful, Appeals may not issue a statutory notice, and the taxpayer retains its traditional appeals rights. Since the process would have occurred under LB&I’s jurisdiction, the case remains with LB&I for disposition.  (09-11-2015)
Considers Factual and Legal Issues

  1. While Appeals settlement authority is available as needed, LB&I can mediate and resolve factual issues within its existing resolution authority without requiring Appeals settlement authority.

  2. For those issues not requiring settlement authority, Appeals will work to resolve the issue via a mediated agreement between the taxpayer and LB&I. For these issues, Appeals will generally not draft or execute a closing agreement.

  3. Issues involving legal interpretations generally require the consideration of the hazards of litigation. For these issues, Appeals will first work to mediate an agreement that falls within an acceptable range as determined by an analysis of the litigating hazards.

  4. Once an acceptable agreement is reached, the Appeals official will accept the settlement in a closing agreement that finalizes the resolution of the issues. Appeals will make its own evaluation of the hazards pertaining to the issue and will only execute a settlement agreement that falls within an acceptable range. Prior to the FTS referral, LB&I must not commit, or appear to commit, to a settlement with the taxpayer that exceeds LB&I’s authority.

  5. For issues requiring settlement authority, Appeals will analyze the hazards of litigation in the same manner as would be done in the traditional Appeals process.  (09-11-2015)
Initiating FTS Process

  1. FTS may be initiated at any time after an issue has been fully developed.

  2. "Fully developed" will generally be indicated by:

    1. The issuance of a Notice of Proposed Adjustment (Form 5701) to the taxpayer clearly setting out the Government's position

    2. A written response from the taxpayer clearly stating its position and the basis for disagreement

  3. With the concurrence of the Appeals FTS Program Manager and the LB&I Territory Manager, an issue may be accepted when it is adequately developed to facilitate resolution, even though it may not be developed to the extent required for a Revenue Agent Report (RAR).

  4. When considering the use of FTS, it is recommended that the LB&I Issue Manager (in collaboration with the Case Manager) contact his/her Territory Manager and/or the FTS Program Managers to discuss the case/issues. The taxpayer may participate in such discussion via conference call, at the discretion of the Issue/Case Manager.

  5. FTS can be used, if applicable, when Appeals releases jurisdiction of a case to consider new information or new issues.

  6. Application procedures are discussed at IRM  (09-11-2015)
FTS Program Tracking

  1. The Issue Management System (IMS) is the primary LB&I tracking tool for FTS, and it is important to accurately and timely complete appropriate FTS fields in the IMS system.

  2. The following fields have been established within IMS to track and monitor the FTS program in LB&I:

    1. "Fast Track Settlement" – A "Yes" in this field indicates that FTS was used.

    2. "Fast Track Settlement Offered and Refused" – A "Yes" in this field indicates that FTS was offered, but declined by the taxpayer.

    3. "Fast Track Settlement Start Date" - Date that FTS is initiated (application submitted and accepted).

    4. "Fast Track Settlement End Date" – Date FTS process is completed either with a signed agreement or by conclusion that agreement cannot be reached.

    5. "Fast Track Settlement Considered" - A "Yes" in this field if Fast Track was considered and "No" if it was not.

    6. "Territory Manager Concurrence" - This field is required (and will become enabled) if Fast Track Considered is "No"

  3. At a minimum, FTS data on IMS should be updated when the FTS process is initiated and when it is completed.

  4. IMS fields relevant to FTS may be modified, or new fields added as experience is gained with IMS and its reporting capabilities. Personnel inputting FTS data on IMS should be alert to such changes.  (09-11-2015)
Case Eligibility and Exclusions

  1. While many LB&I cases/issues can be resolved through FTS, some may not be eligible or appropriate for the process. LB&I Issue Managers (in collaboration with the Case Manager) and Territory Managers, plus the Appeals FTS Program Managers will determine eligibility and appropriateness utilizing the following criteria.  (09-11-2015)
General Considerations

  1. The LB&I Issue Manager (in collaboration with the Case Manager) and the taxpayer will evaluate their individual circumstances to determine if this process meets their needs to bring the case to conclusion within the agreed upon time frames.

  2. Fast Track Settlement may not be the appropriate dispute resolution process for all cases.

  3. The LB&I Issue Manager (in collaboration with the Case Manager) and taxpayer should explore other dispute resolution options if a case is determined to be ineligible or inappropriate for FTS.

  4. The greatest opportunity to reduce administrative burden and costs for all parties through the use of FTS exists in cases where:

    1. All issues are raised and the examination process is nearly complete

    2. All claims are timely filed and examined

    3. Issues are fully developed

    4. Taxpayer has stated its position in writing

    5. Unagreed issues are limited in number

  5. FTS process works best in cases where all unagreed issues are included in the application, however:

    1. Individual unagreed issues or groups of issues will be accepted for FTS in cases where it is determined to be in the best interest of tax administration.

    2. Acceptance of individual issues may be limited due to availability of Appeals resources.

  6. When FTS is unsuccessful in resolving all issues, the taxpayer will be offered the opportunity to pursue resolution through traditional Appeals.

  7. If the taxpayer pursues the traditional Appeals process, Appeals management will ensure a fair and impartial hearing. IRM states that the traditional appeal will not be assigned to the same ATCL or AO that heard the FTS session, unless concurrence is received in writing form the taxpayer and LB&I prior to assignment. This policy should be made clear to the taxpayer at the beginning of the process, and if the taxpayer is unable to accept this policy, the taxpayer may decide to forego the Fast Track option and go to traditional Appeals.


    Post Appeals Mediation is not available for cases that were previously mediated through a different alternative dispute resolution program within Appeals, such as Fast Track Settlement. (See Rev. Proc. 2014-63).  (09-11-2015)
Eligible Cases

  1. Generally cases worked under the jurisdiction of LB&I are eligible for FTS.

  2. Under limited circumstances, cases with unique characteristics requiring special handling may be accepted for FTS with approval of the Appeals FTS Program Managers and the LB&I Territory Manager. These cases include:

    1. Cases involving taxpayers in bankruptcy where LB&I follows the provisions of IRM 4.27.2, Bankruptcy - Examiner Responsibilities, regarding notification to Chief Counsel and Department of Justice. Since the final tax determination is under the jurisdiction of a court, a closing agreement will generally not be used. The decision to reduce the liability in the proof of claim rests with LB&I, in accordance with Chief Counsel and Department of Justice guidelines.

    2. Cases involving Tax Equity & Fiscal Responsibility Act of 1982 (TEFRA) procedures where the first level entity and the major controlling shareholder/partners are included in the Fast Track Session.LB&I will complete the required TEFRA administrative proceedings, including Notice of Proposed Adjustment (NOPA), Notice of Beginning Administrative Proceedings (NBAP), and Notice of Final Partnership Administrative Adjustment (FPAA) procedures for all levels, including investor statutes. Appeals will provide an Appeals Official to conduct the Fast Track Session at the first entity level and help the parties reach a settlement. A Waiver on Assessment Form 870P-AD type of agreement will be used to secure agreement from the entity and controlling shareholders/partners. Closing agreements are not normally used in TEFRA cases, but may be used at the option of the parties.

    3. Joint Committee cases, utilizing procedures under IRM and IRM 4.36.  (09-11-2015)
Cases and Issues Not Appropriate for FTS

  1. The following cases/issues are generally not appropriate for the Fast Track Settlement Program:

    1. Docketed issues

    2. Issues challenging the constitutionality of tax laws

  2. The following issues will be excluded from FTS:

    1. Issues designated for litigation

    2. Issues under consideration to be designated for litigation

    3. Issues for which the taxpayer has filed a request for competent authority assistance

    4. Issues for which the taxpayer has requested the simultaneous Appeal/Competent Authority procedure described in section 8 of Rev. Proc. 2002-52 , 2002-31 IRB 242

    5. Issues that are part of a whipsaw transaction

    6. Issues for which mediation would not be consistent with sound tax administration

    7. Issues that have been identified in a Chief Counsel Notice, or equivalent publication, as excluded from the FTS process.

  3. Issues specifically excluded under (2) above will result in the exclusion of the entire case.

  4. Issues for which the Service is in the process of establishing a uniform settlement position (e.g. - certain listed transactions) may be excluded from FTS.  (01-01-2007)
General Procedures

  1. LB&I and Appeals have established joint operating procedures for the case application, submissions, screening and resolution processes.

  2. Joint LB&I/Appeals procedures are covered by this IRM subsection.

  3. Additional procedures applicable only to the Appeals function for FTS cases may be found in IRM Part 8.  (09-11-2015)
Consideration of Fast Track Settlement

  1. Fast Track Settlement is premised on the basis that the LB&I Issue/Case Manager and taxpayer have exhausted existing issue resolution strategies available within LB&I.

  2. Fast Track Settlement is an alternative dispute resolution (ADR) initiative which must be considered by the LB&I Issue/Case Manager when there are unagreed issues which cannot be resolved between the taxpayer and the examination team. FTS consideration and conclusions reached will be documented in the case activity record.

  3. The taxpayer should be provided with a copy of the Fast Track Settlement Publication 4539 at the opening conference or they may obtain a copy at http://www.irs.gov/Forms-&-Pubs.

  4. Consideration of FTS could occur at any phase of the examination process when LB&I anticipates disagreement on an issue.

  5. At a minimum, the potential use of Fast Track should be discussed and documented at the following points in the examination process where applicable:

    1. Opening conference (meeting) (documented within the agenda and/or corporate interview)

    2. Mid-cycle risk analysis (documented within Form 13744 , Risk Analysis Worksheet)

    3. When potentially unagreed issues are proposed (documented within Form 5701 and/or Form 886-A)

  6. To ensure that the taxpayer understands of the FTS process, the LB&I team should provide a copy of Rev. Proc. 2003-40 to the taxpayer before the taxpayer submits its application for FTS.

  7. Participation in FTS does not preclude the taxpayer from requesting traditional Appeals consideration if the FTS process is not successful in resolving the case. See IRM  (09-11-2015)
Determining Eligibility/Suitability

  1. The LB&I Issue/Case Manager will explain the Fast Track Settlement process to the taxpayer and determine whether the case qualifies for Fast Track Settlement using the case eligibility and exclusion criteria of IRM

  2. The case manager should ensure the issue is fully developed by discussing it with the agent and others who participated in examining the issue.

  3. The LB&I and Appeals Program Managers are available to assist the parties in determining whether the case is suitable for the FTS process.

  4. If the case does not qualify for FTS, the standard examination procedures and closing process are to be followed.

  5. Any request for FTS denied to the taxpayer by the LB&I Issue/Case Manager, requires concurrence of the LB&I Territory Manager.

  6. In all cases, the Case Manager will forward a copy of any denied request, along with a brief statement as to the reasons for denial, to the LB&I Territory Manager. A pro forma memo requesting Territory Manager concurrence with Fast Track denial is contained at Exhibit 4.51.4-2. A completed copy of this memo will be maintained in the case file.  (09-11-2015)
Screening and Approval of Application

  1. When Form 14017, Application for Fast Track Settlement, is signed by the taxpayer, the Case Manager and the appropriate LB&I Territory Manager, the referring LB&I Case Manager will email the application to the FTS mailbox at *AP ATCL FTS@irs.gov with an information copy to LB&I FTS Coordinator.

  2. The Appeals FTS Program Manager, in coordination with the LB&I FTS Program Manager, will screen the application to insure the case is appropriate for FTS.

  3. Acceptance or rejection of an FTS application will be based on a review of information submitted, discussions with the LB&I Issue/Case Manager, and the recommendation of the assigned Appeals Team Manager (ATM).

  4. The Appeals Program Manager will determine availability of Appeals staffing resources before accepting the case.

  5. If accepted, the LB&I Case Manager and the taxpayer will be contacted by the assigned appeals officer within ten days of receipt of the application.

  6. Any case started without concurrence of both the Appeals Fast Track Program Manager and the LB&I Territory Manager will, at the discretion of either manager, be treated as a withdrawn case. If a case is not accepted into the FTS Program, the LB&I Territory Manager and Appeals FTS Program Managers will jointly notify the LB&I Issue/Case manager(s) and the taxpayer within ten days of receipt of the application.

  7. The FTS process is limited to 120 calendar days, unless the LB&I Territory Manager and the the Appeals Fast Track Program Manager agree to an extension.  (01-01-2007)
LB&I Procedures

  1. This section discusses the general procedures to be followed by LB&I personnel to initiate the application and acceptance process for FTS cases.  (09-11-2015)
LB&I Participation in the Fast Track Settlement Process

  1. The LB&I team is fully involved in the Fast Track Settlement process as an equal participant.

  2. LB&I participants will include the Issue Manager and the Case Manager and others who have knowledge and expertise which may contribute to issue resolution.

  3. The LB&I Issue/Case Manager, in consultation with the Appeals Official, will determine the LB&I participants. In addition to the Issue/Case Manager, participants will generally include the team coordinator and/or revenue agents who developed the issue(s). Depending on the issue(s), the case manager may also request the participation of specialists.  (09-11-2015)
Submission of Application

  1. When issues are identified as potentially appropriate for FTS settlement by either the taxpayer or the examination team, the LB&I Issue/Case Manager will discuss the issues and case with the taxpayer. Discussions should include:

    1. Suitability of issues for the FTS process

    2. Willingness of both parties to consider alternative resolution options

    3. Adequacy of issue development

    4. Ability of both parties to devote resources to the process

  2. The LB&I Issue Manager (in collaboration with the Case Manager) should discuss the case with the LB&I Territory Manager, the LB&I FTS Program Manager and/or the Appeals FTS Program Manager before initiating the Fast Track application process.

  3. The LB&I Case Manager and the taxpayer will identify a preferred conference site, and Appeals will make every attempt to hold the Fast Track Session conference at the preferred site, but may not in all cases be able to honor the taxpayer/LB&I request.

  4. Upon reaching agreement to participate in the Fast Track Settlement process, both the taxpayer and LB&I Case Manager will jointly complete and sign the Form 14017, Application for Fast Track Settlement.

  5. When the Form 14017 is ready for submission and is signed by the appropriate LB&I Territory Manager, the referring LB&I Case Manager will email the application to the FTS mailbox at *AP ATCL FTS@irs.gov with a copy to the LB&I FTS Program Coordinator.

  6. The Appeals Fast Track Program Manager will notify the ATM about the application, and the ATM will pre-assign an ATCL or AO to the case.

  7. Since LB&I retains jurisdiction for the case and responsibility for the statute, the case manager will not forward the case file to Appeals.  (09-11-2015)
Forwarding Application for LB&I Fast Track to Approving Managers

  1. In addition to the the FTS application referenced above, the LB&I Case Manager (in collaboration with the Issue Manager) will include the following submissions via the FTS mailbox at *AP ATCL FTS@irs.gov, with a copy to the LB&I FTS Program Coordinator:

    1. The "LB&I Fast Track Settlement Application Issue Statement" (Exhibit 4.51.4-1) for each issue being referred

    2. Form 5701, Notice of Proposed Adjustment, with Form 886-A, Explanation of Items


      For Compliance Assurance Process (CAP) issues, include the Issue Resolution Agreement.

    3. Names and titles of the LB&I and taxpayer participants

    4. Taxpayer's written response (a formal protest is not required)

    5. Form 2848, Power of Attorney and Declaration of Representative, if applicable

  2. The Issue Statement will contain a descriptive name of the issue being referred, the Uniform Issue List (UIL) number, dollar amounts by year, and a brief statement of basis for the proposed adjustment and the taxpayer's basis for disagreement.  (09-11-2015)
Status and Aging Reason Code for FTS Cases

  1. Agents are allowed to "close their case" for monitoring purposes while applying the FTS program to resolve unagreed issues. Agents can use the FTS program, even if doing so would cause a case to exceed its estimated completion date (ECD).

  2. For FTS cases where all other examination issues are resolved except for one or more FTS issues, agents should use AIMS/ERCS Status Code 15 together with Aging Reason Code 23. Cases with AIMS/ERCS Status Code 15 and Aging Reason Code 23 will be considered "closed" for monitoring purposes.

  3. If circumstances arise where all issues are resolved, except for the FTS issue(s), then the ECD may be extended up to 120 days on IMS to account for additional time necessary to complete FTS. Follow industry specific procedures for obtaining approval to extend the ECD.  (09-11-2015)
Appeals Procedures

  1. This section discusses the general procedures to be followed by Appeals personnel regarding the FTS application, acceptance and case assignment processes.

  2. Specific Appeals procedures are outlined in IRM Part 8.  (09-11-2015)
Appeals Participation in the Fast Track Settlement Process

  1. Appeals functions in a mediation role to guide LB&I and the taxpayers to a mutually acceptable resolution.

  2. Appeals plays an active role in the issue resolution process.

  3. Appeals may advocate a resolution position, but cannot impose such position on either party.

  4. Once an agreement is reached, Appeals will use its settlement authority to implement the agreed-upon resolution.

  5. FTS cases are assigned to appeals officers, as listed below:

    1. Primarily assigned to a Grade 15 Appeals Team Case Leader (ATCL) trained in mediation

    2. In limited cases, assigned to Grade 14 appeals officers, trained in mediation

  6. The Appeals FTS team may include Appeals Technical Specialists for Compliance Coordinated Issues (CCI) and Appeals Coordinated Issues (ACI) when appropriate.

  7. Other appeals officers will be assigned to the team as needed, and at the discretion of the ATCL/ATM.

  8. Appeals may utilize mediation trained individuals from other divisions as co-mediators when their specific insight and technical knowledge of the issue being considered would make such participation beneficial to resolution of the issue.  (09-11-2015)
Appeals Process for Assignment of Fast Track Settlement Cases

  1. When the completed application is ready for submission, the LB&I Case Manager will contact the Appeals FTS Program Manager, who will provide direction on where to send the package.

  2. In most cases, the Appeals FTS Program Manager will alert the ATM that a Fast Track Settlement case is being sent to the local office. When time permits, the ATM and Appeals FTS Program Manager will preassign an Appeals Official to the case.

  3. Within three business days of receipt, the ATM will review the application to determine if the FTS eligibility requirements are met. The ATM may involve an ATCL or other Appeals Official in the review.

  4. If the ATM determines the case is eligible, the ATM must contact the Appeals FTS Program Manager to discuss acceptance of the case.

  5. The ATM will indicate acceptance of the case by signing the application form. The Appeals FTS Program Manager and the LB&I Territory Manager will consider the ATM’s recommendation, along with other factors, in deciding whether to accept case for FTS.

  6. If the ATM/ATCL does not recommend acceptance of the case, this will be communicated to the Appeals FTS Program Manager, who may assign the application to another ATCL for a second review.

  7. Any case started without the approval of both the Appeals FTS Program Manager and the LB&I Territory Manager will, at the discretion of the respective Managers, be treated as a withdrawn case.

  8. Except with the concurrence of the LB&I Territory Manager and the Appeals FTS Program Managers, the FTS process is limited to 120 days. The start date for the 120-day Fast Track process is the date the Appeals Official accepts the FTS application.  (09-11-2015)
Cases Not Ready for Fast Track

  1. Issues referred for FTS resolution should be fully developed. Requests for Technical Advice, Field Service Advice, etc. will not be made during the FTS process. Cases requiring further issue development are not ready for FTS, and the ATM will recommend rejection accordingly.

  2. If the ATM determines that the case does not qualify for FTS (e.g. issues not fully developed, issues do not qualify, Appeals resources are not available, issues excluded), the ATM will discuss the rationale for the denial with the Appeals FTS Program Manager.

  3. Appeals FTS Program Manager may concur with the recommended denial of the FTS request, or may accept the case and identify necessary resources.

  4. If the FTS request is recommended for rejection, the Appeals FTS Program Manager will discuss the rationale for rejection with the LB&I Territory Manager and the LB&I FTS Program Manager.

  5. The Program Managers will discuss the rationale for the denial with the taxpayer and LB&I Case/Issue Manager within ten business days of receipt of the application.  (09-11-2015)
Case Accepted for Fast Track and Assigned in Appeals

  1. After the Form 14017, Application for Fast Track Settlement, is accepted by the LB&I Territory Manager and Appeals FTS Program Managers, the ATM will assign an appeals officer or an Appeals Team Case Leader within seven business days of receipt of the application.

  2. Appeals will normally accommodate the site jointly requested by the LB&I Case Manager and the taxpayer.

  3. Where travel or personnel resource limitations impose restrictions on Appeals ability to accommodate the requested site, approval of the Appeals FTS Program Manager is required to use an alternative site.

  4. The ATM and ATCL shall coordinate the need to use a team of appeals officers.

  5. Where the case includes Appeals Specialty Issues, the appeals officer or ATCL will follow IRM requirements to refer the issues to the Appeals Director Domestic Operations or Appeals Director International Operations. Such referral shall be initiated by telephone and followed up with a formal written referral. The Appeals Technical Specialist may be assigned if warranted.

  6. Request may be made to Appeals management for specific assignment of appeals officers with experience or particular technical expertise involving the issue.  (01-01-2007)
Appeals Official's Role Upon Assignment

  1. Within ten business days after the case is assigned, the appeals official will call the taxpayer and LB&I Case Manager to start the Fast Track Session planning process.

  2. The Appeals Official may identify and discuss the need to limit the number of participants to the Fast Track Session.

  3. Fast Track cases are excluded from the Settlement Authority Panel Review because LB&I must agree to any disposition of the issues.  (01-01-2007)
Appeals CCI/ACI Coordinator's Role in Coordinated Issues

  1. Where an issue is coordinated as either a CCI or ACI issue, the Appeals Team shall follow the procedures in IRM

  2. To meet the two-pronged requirement that all decision makers are present at the Fast Track Session and that Coordinated CCI/ACI issues are subject to the review & concurrence of the Appeals Technical Specialist , the Appeals Technical Specialist will normally serve as a team member and will participate in the Fast Track Session with the taxpayer and LB&I.

  3. If the Appeals Technical Specialist is not part of the Fast Track Appeals Team, settlement of the CCI/ACI issue remains subject to the review & concurrence of the Appeals Technical Specialist. This may be accomplished via telephone discussion.

  4. If there is a disagreement between the Appeals Technical Specialist and the appeals officer on appropriate settlement terms for the issue, the resolution procedures in IRM will be followed.  (09-11-2015)
Role of LB&I Participants in Fast Track Sessions

  1. The LB&I Issue Manager (in collaboration with the Case Manager) will:

    1. Determine the composition of the LB&I Fast Track team

    2. Serve as LB&I's decision maker for all issues under FTS consideration


      However, at the discretion of LB&I, decision making authority may be assumed by a higher level LB&I management official who participates in the session.

    3. Attend all FTS session meetings and consider information and arguments presented by issue specialists for all parties

  2. Personnel selected by the Issue/Case Manager to be part of the LB&I team will:

    1. Be the primary presenters of LB&I's position and technical arguments for issues under consideration

    2. When appropriate, provide rebuttals to arguments raised by the taxpayer

    3. Provide consultation and advice to the LB&I decision maker regarding proposed settlements

  3. If LB&I Counsel representatives are part of the LB&I Fast Track team, their primary role will be to provide advice to LB&I as to legal interpretations and appropriateness of proposed settlements. At the discretion of the LB&I Issue Manager, Counsel may participate in the presentation of the LB&I position and technical arguments for the issues under consideration.  (09-11-2015)
Introduction to the Fast Track Session

  1. The Fast Track Session encompasses all activities from the date the case is accepted through the date of the face-to-face session(s) involving all of the parties.  (09-11-2015)
Planning the Fast Track Session

  1. Planning begins when the taxpayer and LB&I complete the Application for Fast Track Settlement form, which includes a target completion date.

  2. The parties are encouraged to bring their best experts into the Fast Track Settlement process. It is required that the "decision makers" be present.

  3. Appeals will lead the taxpayer and LB&I to develop an overall plan for the Fast Track Session. The plan will include the preparation of an agenda and Form 14000, Fast Track Session Report (IRM

  4. The parties must agree upon a plan to complete the Fast Track Session within 120 days.  (09-11-2015)
Developing the Fast Track Session Report and Agenda

  1. In conducting the Fast Track Session, the Appeals Official will use a Form 14000, Fast Track Session Report and an agenda. The agenda will guide the following:

    1. Communication

    2. Setting the order of issue discussion

    3. Ask reflective questions to clarify the issues

    4. Conference meetings

  2. The Appeals Official will provide the Fast Track Session Report and agenda to all decision makers early the process, and will update them as the session progresses.  (01-01-2007)
Conducting the Fast Track Session

  1. The Fast Track Session will be led by Appeals, but all three parties will be active participants with equal voices.

  2. FTS employs various alternative dispute resolution techniques to propose solutions.

  3. Appeals does not perform in a traditional Appeals role, but will first use an interest-based approach to facilitate a settlement of the issues between the parties.

  4. Using mediating techniques, Appeals will attempt to bring the parties to a mutual resolution of the issues during the Fast Track Session.

  5. As issues are resolved, Appeals will post the results to the Fast Track Session Report and give an updated copy to all participants. Appeals will maintain a history of the updated Fast Track Session Report.

  6. The Fast Track Session may include both combined meetings with LB&I, taxpayer and Appeals together, and separate meetings (LB&I-Appeals, and taxpayer-Appeals) as appropriate.  (09-11-2015)
Appeals Recommendations During Fast Track Session

  1. Appeals may use various methods and techniques to meet the needs and circumstances of each particular case.

  2. The Appeals Official may ultimately make recommendations regarding the settlement of any or all issues (both factual and legal). If acceptable to all parties, the settlement proposal may be adopted.

  3. Neither party is compelled to accept a settlement proposal made by the Appeals Official.

  4. In order for an Appeals settlement proposal to be implemented, both LB&I and the taxpayer must agree. If the taxpayer and Appeals agree to a settlement proposal, but the LB&I Issue/Case Manager rejects the proposal, the Case Manager’s position will be referred to the LB&I Territory Manager for review.

  5. If the LB&I Territory Manager concurs with the proposed settlement rejection, such rejection must be expressed in writing by the Territory Manager. If an acceptable alternative settlement cannot be reached, the issue will be closed unagreed. If the Territory Manager does not concur in rejecting the Appeals settlement proposal, the proposal will be accepted by LB&I.  (09-11-2015)
Ex Parte Communications

  1. The prohibition on ex parte communications between appeals officers and other Internal Revenue Service employees provided by section 1001(a)(4) of the Internal Revenue Service Restructuring and Reform Act of 1998 does not apply to the communications arising in Fast Track Settlement, because the Appeals personnel are not acting in their traditional appeals settlement role.  (09-11-2015)
New Information Disclosed as Part of Fast Track Process

  1. If the taxpayer or LB&I presents new information during the Fast Track Session that the opposing party has not considered, Appeals will give the receiving party adequate time to evaluate the information/documentation.

  2. Where consideration of substantial new information will unduly delay the Fast Track Session, the case may be withdrawn from FTS by either Appeals, LB&I or the taxpayer. The case may be reconsidered for FTS after the issues are fully developed.

  3. In situations where substantial new information is introduced during the FTS process, such new information may serve as a basis to raise a new issue or file a claim. The new information may be accepted into the FTS process subject to limitations discussed under IRM However, such acceptance may only take place if it would not delay the FTS process beyond the planned 120 days, and if all parties concur in the acceptance of the new information.  (01-01-2007)
New Issues/Claims Raised During Fast Track Session

  1. Experience proves that lapse time is doubled when new issues or claims are brought into Fast Track Settlement after the process is started. For this reason, new issues or claims will generally not be accepted as part of the FTS process.

  2. The grounds for raising a new issue or claim must be substantial, and the potential effect on the tax liability must be material. New issues or claims should not be raised to trade against existing issues.

  3. A taxpayer's claim requires LB&I examination action. However, such action need not be part of the FTS process.

  4. New, unrelated claims or new issues should not be attached to an existing FTS process, but should generally be considered in a separate process outside of FTS.

  5. The parties will work to resolve the issues originally referred to Fast Track Settlement and the FTS process will not be suspended to allow examination of the new claims/issues.

  6. If the taxpayer declines to bring the Fast Track process to a conclusion prior to consideration of such claims, the Service may withdraw the case from FTS. The taxpayer may then request further FTS consideration.

  7. Once a case comes to FTS, the taxpayer and Service should expect that all the issues and claims have been raised, that all relevant information has been disclosed, and that the case is ready for resolution.

  8. Addressing this challenge, and to prevent new issues arriving late in the process, the Appeals Official shall confirm that all issues are listed on the Fast Track Session Report at the beginning of the process.  (09-11-2015)
Developing the Fast Track Session Report

  1. Form 14000, Fast Track Session Report, is an administrative document that assists all parties in planning the Fast Track Session and reports the progress on the issues in dispute.

  2. At the conclusion of the process, the Fast Track Session Report forms the basis for drafting closing agreements and the Revenue Agent's Report (RAR).

  3. The Fast Track Session Report is used to identify the issues and reflect agreement from all parties as to the following:

    1. Number of issues

    2. Description of issues

    3. Amounts in dispute

    4. Conference dates

    5. Plan of action to be followed in the Fast Track Session process

  4. In addition to documenting all contacts in the Appeals Centralized Data System (ACDS) activity record and conference notes, the Appeals Official will prepare the Fast Track Session Report (Session Report) at the start of the Fast Track Process, and update the Session Report timely as decisions are made.

  5. The Appeals Official will:

    1. Give both taxpayer and LB&I a copy of the Session Report at the beginning of the process, after each decision is reached and when the Session Report is updated,

    2. Confirm that the parties agree with the entries on the Session Report, and,

    3. Solicit the signatures of the taxpayer and LB&I Issue/Case Manager on the Session Report at the conclusion of the session (agreed or unagreed).

  6. The signing of the Fast Track Session Report does not constitute a final settlement. The signature on the Fast Track Session Report carries no more force and effect than a memorandum of understanding between the parties.

  7. The Fast Track Session Report is not a waiver of restrictions on assessment, nor does it terminate consents to extend the statute of limitation, nor does it start the running of any statute of limitations, i.e. - one-year statute under section 6629(f) involving TEFRA proceedings.

  8. The signature of a Service Official on the Fast Track Session Report does not create a promise against reopening the case.  (01-01-2007)
Reconsideration of Fast Track Session Report Agreements

  1. The Fast Track Session Report Agreement shall be treated as final when it is signed, unless the specific conditions outlined below warrant altering the agreement.

    1. If an agreement is reached in a signed Fast Track Settlement Session Report, but a subsequent authoritative decision is rendered that affects the agreement in a substantive and material manner, either LB&I or Appeals may reconsider the agreement unless both the taxpayer and Appeals previously signed a closing agreement (Form 906 or 870-AD).

    2. If the change is substantive and material, the agreement should be renegotiated. The word substantive shall mean that the change in law or legal precedent results in a meaningful change to Appeals assessment of the hazards of litigation.

    3. Any agreement reached in a Fast Track Settlement Session may be reopened in the case of fraud, malfeasance, concealment or misrepresentation of material fact.

    4. The grounds for such action must be substantial (strong, possessing real merit) and the potential effect on the tax liability is material (having real importance and great consequence).

    5. NEW ISSUES - There must be some good, sound, substantial grounds already existing in the record or known to the decision maker to raise the new issue.

    6. Substantial grounds are those that cause a decision maker to be quite certain, at the time a new issue is raised, that the Government will prevail if the issue is litigated. Quite certain does not necessarily mean 100 percent certain, but it does mean a very high degree of certainty.

    7. Outside of these strict parameters, LB&I and Appeals shall respect the settlement terms agreed to on the Fast Track Session Report.

  2. Appeals commits to advocate the agreement reached in a signed Fast Track Session Report to reviewing authorities, such as the Joint Committee on Taxation.

  3. In the event of a request to reconsider the Fast Track Session Report agreement, the LB&I and Appeals FTS Program Managers must agree to reconsider the agreement. In the event the two parties are unable to agree, the decision shall be elevated to the Executive Owners of the Fast Track Settlement process.  (01-01-2007)
Appeals or LB&I May Terminate the Fast Track Session

  1. If after a reasonable time, it is apparent that no further benefit may be derived from the process, the LB&I Issue/Case Manager and/or the Appeals Official should consider terminating the session.

  2. If the Appeals Official decides to terminate the Fast Track Session, concurrence of the Appeals FTS Program Manager is required.

  3. If the LB&I Issue/Case Manager decides to terminate the Fast Track Session, concurrence of the appropriate Territory Manager is required.

  4. The party terminating the Fast Track Session shall notify the other parties by letter explaining the reason for termination and outlining the taxpayer's right to a traditional Appeals process.

  5. If no issues have been resolved prior to withdrawal, no further reporting to the taxpayer or LB&I by Appeals will be required.

  6. If some issues have been resolved at the time of withdrawal, standard FTS process closing procedures will be followed with regard to the resolved issues.

  7. The taxpayer will retain all standard Appeals rights with regard to any issues remaining unresolved at the time of withdrawal.  (09-11-2015)
Taxpayer May Withdraw at Any Time

  1. The taxpayer may withdraw from the FTS process at any time by notifying the LB&I Case Manager and the Appeals representative in writing.

  2. For any issue(s) that remain unresolved, taxpayers will retain all of the standard Appeals rights.

  3. LB&I will close the case as "unagreed" or "partially agreed" as appropriate and forward the case to Appeals upon receipt of an acceptable protest along with the taxpayer’s request for an Appeals hearing.

  4. The taxpayer should be advised that the case will be closed through the standard LB&I closing process.  (09-11-2015)
Fast Track Settlement Authority

  1. Appeals has settlement authority under Delegation Order 8-3 (formerly Delegation Order 97, Rev. 34).Also see Delegation Order 8-9, Authority of Appeals to Administer Alternative Dispute Resolution Procedures.

  2. An Appeals Official, such as an ATCL, Appeals Team Manager, or an appeals officer (no lower than a Grade 14), uses delegated settlement authority to approve and enter into any FTS Agreement that involves hazards of litigation by using a Specific Matters Closing Agreement (Form 906) or a waiver Form 870-AD.

  3. Appeals makes its own evaluation of the hazards on Fast Track issues. LB&I should not commit or appear to commit to a settlement that exceeds their authority to resolve issues prior to referral to Fast Track Settlement.

  4. Potential settlement positions that may have been discussed with the taxpayer before an FTS referral may be presented to the Appeals Official for consideration during the Fast Track session. However, Appeals will do an independent evaluation of the hazards and will not execute a settlement that does not fall within such hazards evaluation or established settlement guidelines for the issue.

  5. If the Appeals Official does not accept a settlement proposed between the taxpayer and LB&I, the Official will fully explain to both parties why it cannot be accepted.

  6. If a Joint Committee report is required for the case, Appeals will delay execution of the closing agreement until LB&I completes the Joint Committee procedures. Where Appeals settlement authority has been utilized on a Joint Committee case, the Appeals Official involved in the settlement will be available to respond to inquiries from the Joint Committee regarding the settlement.  (01-01-2007)
Closing the Fast Track Settlement Process

  1. When the issues are resolved, or a decision is made that a resolution cannot be reached, the FTS case will be closed promptly.

  2. The Appeals Official will follow the FTS closing procedures carefully so that both parties are notified of the outcome.

  3. The closing letter will be issued promptly by Appeals to both parties, making certain to date the letter.

  4. If the case is unagreed an Appeals Case Memorandum (ACM) will not be prepared, and the administrative file will be returned to LB&I without Appeals notes prepared to evaluate the issue.  (09-11-2015)
Closing the FTS Process With Settled/Resolved Issues

  1. When an agreement is reached, a Fast Track Session Report will be completed by Appeals, reflecting the agreement, and all parties will sign the report.

  2. Where Appeals settlement authority has been utilized, Appeals will prepare a closing agreement based on the signed Fast Track Session Report.

  3. When closing agreements are used, the taxpayer will sign the agreement, and Appeals will execute it on behalf of the Government. In cases involving Joint Committee (JC) review, Appeals will suspend its FTS work unit without signing the closing agreement, and provide instructions for LB&I to return the closing agreement to Appeals for execution after the JC review process is complete.

  4. At the conclusion of the FTS process, Appeals will provide the LB&I team with the following:

    1. Form 5402 (Appeals Transmittal and Case Memo)

    2. ACM for settled issues

    3. Executed Closing Agreement if utilized (For JC cases, signed by the taxpayer only, and to be signed by Appeals after JC review)

    4. Completed Fast Track Session Report

    5. FTS workpapers prepared by Appeals

    6. Settlement agreements for TEFRA signed by taxpayer (A list of investor names, TINs, and one-year assessment dates will be shown on Form 3210 used to transmit the package to LB&I)

  5. Preparation of brief Appeals Case Memorandum (ACM)

    1. Prepared for issues settled using Appeals settlement authority.

    2. ACMs prepared for FTS cases will be a brief summary of significant facts, body of law relied upon by the parties, and evaluation and recommendation as to whether the disposition should be accepted.

    3. For JC cases, ACMs will be included in the JC Report in support of the settlement reached.

    4. ACMs will not be prepared for issues resolved within LB&I's resolution authority, or for unresolved issues.

  6. At the completion of the FTS process, LB&I will proceed to complete actions on the overall case. Resolved issues will be incorporated into the RAR, and LB&I will proceed to complete actions on the overall case, as indicated in IRM

  7. The Appeals FTS participants will complete and submit internal Appeals reporting requirements in accordance with IRM 8.1, Appeals Function.

  8. The Appeals FTS Program Manager will provide a report on the FTS case results to the LB&I Territory Manager. The report will consist of Form 5402, ACM for settled issues, completed FTS Session Report, and a copy of the agreement form.  (09-11-2015)
Closing the FTS Process with Unresolved Issues

  1. If the Fast Track Settlement process is unsuccessful in resolving/settling an issue, Appeals will send a letter to the taxpayer and LB&I. The letter will state who participated in the process, list the issue(s) that were not resolved, and explain the taxpayer's rights to appeal. This would be done in the case of withdrawn issues as well.

  2. The administrative file consisting of the Form 5701 with the taxpayer's written response, FTS workpaper and Form 5402 will be provided to LB&I for inclusion in the case file. No ACM will be prepared for unresolved issues.

  3. At the completion of the FTS process, LB&I will proceed to complete actions on the overall case, as indicated at IRM

  4. The Appeals FTS participants will complete and submit internal Appeals reporting requirements in accordance with IRM 8.6 .

  5. A report on the FTS case results will be provided to the LB&I Program Manager by the Appeals Program Manager.  (09-11-2015)
Fast Track Settlement and Joint Committee Cases

  1. Special procedures must be followed in cases subject to Joint Committee (JC) reporting requirements. General JC procedures under IRM 4.36 apply to cases utilizing the Fast Track Process. In addition to, and in conformity with the general JC procedures, the following apply to FTS cases.

  2. The FTS Application form provides for the identification of potential Joint Committee status. If the Joint Committee criteria are met, or will potentially be met upon resolution, the LB&I Case Manager must so indicate on the FTS Application.

  3. Upon assignment of a Fast Track case, Appeals must confer with both the taxpayer and LB&I to determine whether the case is subject to JC reporting requirements, and record the results in the ACDS case activity record.

  4. At the completion of the Fast Track process, the case status relative to JC reporting will be reconfirmed before finalizing the settlement, taking into consideration the results of any issue resolutions reached.

  5. Appeals is responsible for preparing the ACM supporting the basis of any issue settlements reached in Fast Track. Appeals will prepare an ACM that explains ONLY the SETTLED FTS issues in sufficient detail and analysis to apprise the JC of the Appeals evaluation and settlement of the Fast Track issues.

  6. On the day agreement is reached, the Fast Track Session Report will be completed to document the terms and settlement dollar adjustments. All parties (Appeals, taxpayer and LB&I) will sign off on the Session Report.

  7. Appeals will explain to the taxpayer that the settlement is treated as final for computation purposes, but that the settlement is subject to review by the Congressional Joint Committee on Taxation.

  8. LB&I may begin preparing the tax computation and the JC Report, incorporating the ACM provided by Appeals.

  9. Appeals will close the FTS case on Form 5402, and will give the ACM to LB&I for inclusion in their JC Report.

  10. Since the case is in LB&I jurisdiction, LB&I will make the final tax computation, and write the JC Report.

  11. On the settled issues, Appeals will respond to any concerns raised by the JC regarding the basis for settlement.

  12. Issues resolved between the taxpayer and LB&I without using Appeals settlement authority (resolved within the LB&I Issue Manager's authority), will not have an ACM, and LB&I will respond to JC inquiries and concerns for these issues.

  13. Appeals will prepare the closing agreement on settled issues, and solicit the taxpayer's signature on the closing agreement, but the closing agreement shall not be signed by Appeals on behalf of the Service until the Joint Committee on Taxation clearance letter is received.

  14. After the Joint Committee on Taxation completes consideration of the settlement, only then will Appeals accept the final settlement by executing the closing agreement.  (01-01-2007)
Post Fast Track Settlement Process - LB&I Case Procedures

  1. When the FTS process is completed and all issues are resolved (or determined to be irresolvable at the LB&I level), LB&I will follow standard closing procedures.

  2. At the completion of the FTS process, if further issue/case development is required for FTS or non-FTS issue, it will be completed.

  3. For successful FTS cases, resolved issues will be included in the Revenue Agent's Report (RAR) in accordance with closing agreements and/or Fast Track Session reports resulting from the FTS process.

  4. Issues remaining unresolved will be included in the unagreed RAR, and a 30-Day Letter will normally be issued inviting the taxpayer to request a traditional Appeals hearing.

  5. When some issues are resolved, and other issues remain unagreed, standard partial agreed procedures will be followed in closing the case.

  6. When unsuccessful FTS cases come to traditional Appeals, management will decide how to assign the Appeals personnel. Ex parte restriction will not be imposed on intra-Appeals communications.

  7. Compliance audit results will include FTS issue results.

Exhibit 4.51.4-1 
LB&I Fast Track Settlement Application Issue Statement

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Exhibit 4.51.4-2 
Territory Manager Concurrence Memo

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