IRS expands alternative dispute resolution opportunities.

• Author: Dolan, Michael P.

The IRS recently expanded access to the fast track resolution program and to Appeals mediation and arbitration procedures. In Announcement 2008-105, the IRS extended the fast track settlement program to certain exempt entities and government entities. In Announcement 2008-111, the Service announced the establishment of a two-year test of mediation and arbitration procedures for offers in compromise and trust fund recovery penalty cases under the jurisdiction of the Office of Appeals.

TEGE FastTrack

The Tax Exempt/Government Entities (TEGE) fast track is modeled closely after Rev. Proc. 2003-40 and Announcement 2006-61, both of which establish fast track procedures for Large and Mid-Size Business (LMSB) and Small Business/Self-Employed (SB/SE) taxpayers. The TEGE pilot of its fast track settlement initiative will run for two years. During that period, entities that have unagreed issues in at least one open period under examination can work with the TEGE and the Office of Appeals to resolve the issue while the case is still in TEGE jurisdiction.

The fast track settlement procedures are available to resolve both factual and legal issues at any time after an issue has been fully developed but before the issuance of a 30-day letter (or its equivalent). The announcement identifies a list of issues that will not be available for fast track; however, a majority of issues that arise during an audit will be eligible for fast track consideration. A taxpayer who is interested in participating in the TEGE fast track settlement program should contact the group manager of the examining agent conducting the audit for any periods under examination. Interested taxpayers should also complete the Application for Fast Track Settlement, a copy of which is included as an attachment to Announcement 2008-105 (http://tinyurl. com/AFTSapp).

Since fast track issues remain under the jurisdiction of the TEGE division responsible for conducting the examination, any ultimate resolution must be approved by the TEGE. Appeals will assign an officer who has been specifically trained in the fast track program and in dispute resolution techniques. The Appeals officer will assume responsibility for the administrative aspects of fast track, structuring the agenda and ground rules and generally managing the process in a manner designed to identify resolution options. If the Appeals officer identifies a resolution that is acceptable to the taxpayer but is rejected by the TEGE group...