The traditional route to IRS Appeals is slow by design. The examination or collection office closes its file, writes it up, and ships it to an Appeals Officer who starts from scratch. That process can take many months.

The IRS built two programs to shortcut it. Fast Track Settlement brings an Appeals mediator into an open examination. Fast Track Mediation does the same for certain collection disputes. Neither is right for every case. Both are worth knowing about.

Fast Track Settlement for small business and self-employed taxpayers

Fast Track Settlement (FTS) for the Small Business/Self-Employed division was formally established by Rev. Proc. 2017-25, as IRM 8.26.2.1.2 confirms. It applies while the examination is still open, before a 30-day letter issues.

How it works

  • The examiner and the taxpayer jointly complete Form 14017, Application for Fast Track Settlement (IRM 8.26.2.7).
  • An Appeals Officer trained in mediation serves as the neutral, called the FTS Appeals Official (IRM 8.26.2.2).
  • The FTS Official first uses mediation techniques. If that fails, the official may propose a settlement, but the proposal is not imposed on either party.
  • The IRM states a goal of completing the entire process within 60 calendar days (IRM 8.26.2.1).

What is excluded

IRM 8.26.2.6 lists exclusions, including issues docketed in any court, frivolous issues, and whipsaw issues where resolving one taxpayer's case could produce inconsistent treatment of another. It also says that if any one issue in the case is ineligible, all issues are ineligible.

If it fails

You keep your appeal rights. IRM 8.26.2.2 says that if FTS does not produce a resolution, the taxpayer retains the right to request traditional Appeals consideration. One catch: post-Appeals mediation is not available for issues that went through FTS without resolution.

Fast Track Mediation for collection cases

Fast Track Mediation-Collection (FTMC) rests on Rev. Proc. 2016-57, which IRM 8.26.3.1.2 identifies as the program's authority, effective November 18, 2016.

What it covers

IRM 8.26.3.4.1 lists eligible disputes in two main areas:

  • Offers in compromise. Factual disagreements such as asset values, dissipated assets, deviations from expense standards, jointly held assets, and projected future income.
  • Trust Fund Recovery Penalty. Whether a person was responsible for collecting and paying over the tax, whether the failure was willful, and whether a payment was properly designated.

What it does not cover

IRM 8.26.3.4.2 excludes, among other things, cases requiring a litigation-hazards assessment, cases referred to the Department of Justice, Collection Appeals Program cases, Collection Due Process cases, frivolous issues, and non-responsive taxpayers. If you are already in a CDP hearing, FTMC is not your tool.

How it works

Collection completes Form 13369, Agreement to Mediate, and gets your signature. Each side provides a written position, and an offer case needs a full reasonable collection potential computation (IRM 8.26.3.3). The IRM estimates the process at 30 to 40 calendar days (IRM 8.26.3.1).

The mediator here has less power than in FTS. Under IRM 8.26.3.1, the Appeals mediator does not have settlement authority and cannot render a decision on any disputed issue. The mediator can suggest a nonbinding resolution. The case resolves only if you and Collection agree.

Watch the clock

FTMC neither suspends nor extends the time to request an Appeals hearing (IRM 8.26.3.1). If you are facing a deadline for a protest, a CAP appeal, or anything else, that deadline keeps running during mediation. Here's the part most people miss: a pleasant mediation that runs past your appeal deadline can leave you with fewer options than you started with.

Post-Appeals mediation

There is also mediation after a case is already in Appeals and settlement talks have stalled. It is a separate program with its own eligibility rules. If you are deep into an Appeals case that has reached an impasse on a factual issue, ask the Appeals Officer whether post-Appeals mediation is available for your issues.

Preparing for a fast track session

Fast processes punish improvisation. Before you sign Form 14017 or Form 13369, make sure you can do each of the following:

  1. State the dispute in one paragraph. If you cannot, the case may be too broad for fast track.
  2. Produce your evidence now. The documents you would rely on in Appeals should be organized and ready at the start, not promised for later.
  3. Write a position statement. FTMC requires one from each side. In FTS, a short written summary still helps the mediator see the issue your way.
  4. Know your settlement range. Mediation moves quickly toward numbers. Decide what you would accept before the session, not during it.
  5. Check every deadline. Confirm which deadlines keep running during the process and calendar them.

For an offer in compromise, the reasonable collection potential computation drives everything. Disputes over asset equity, income projections, and allowable expenses are exactly what FTMC is designed to narrow. If you are still deciding whether an offer makes sense at all, the firm's overview of the offer in compromise process is a useful starting point.

Is fast track right for your case?

Good candidates

  • One or two well-defined factual disputes, such as the value of an asset or the amount of a business expense.
  • A good working relationship with the examiner or revenue officer, so the joint application is realistic.
  • A taxpayer who wants resolution quickly and has organized documents ready now.

Poor candidates

  • Cases where the examiner is building toward fraud penalties or a criminal referral. You want counsel and privilege, not speed.
  • Cases where your evidence is still being assembled. A fast process rewards preparation you have already done.
  • Legal disputes that turn on how a court would read the statute. Those belong in a full hazards of litigation analysis.

The strategic question

Fast track programs keep the originating function at the table. In FTS, the examiner is a participant, not someone who has handed the file off. That can be an advantage when the examiner is reasonable and the dispute is narrow. It can be a disadvantage when you need a truly fresh look. Traditional Appeals, with its ex parte protections, may serve you better then.

Let's talk

Choosing the right forum is a strategy decision. If an examiner or revenue officer has suggested fast track, or you are wondering whether to ask for it, call (813) 229-7100 before you sign the application. Let's talk.