IRS makes tax exempt/government entities fast track settlement program permanent.

• Author: Ng, Frank

In Announcement 2012-34, the IRS said it is making the Tax Exempt and Government Entities Division Fast Track Settlement (TE/GE FTS) program permanent.

In 2008, the IRS announced a pilot program to extend fast track settlement to TE/GE cases to expedite case resolution within TE/GE, i.e., while a case is still at the examination level. The pilot program was scheduled to last two years, and it officially expired on Nov. 30, 2010. However, since that time, TE/GE and the IRS Office of Appeals have continued to offer fast track settlement on an informal basis.

Based on the IRS's determination that the program supports its initiative to reduce the time and cost of examination and case resolution, Announcement 2012-34 confirms that the TE/GE FTS will be a permanent program. The only significant change between the pilot program and the permanent program will be an additional level of review of applications to accommodate the management structure of the TE/GE Division.

The TE/GE FTS enables taxpayers that have unagreed issues in at least one open period under examination to work with TE/GE and Appeals to resolve them while the case is still under TE/GE jurisdiction and before it is officially transferred to Appeals. The program may be used to resolve factual and legal issues, and it may be initiated at any time after an issue has been fully developed, but before the IRS issues a 30-day letter (or its equivalent).

Announcement 2012-34 describes key features of fast track settlement, which include:

* The types of cases that are eligible and the types that are excluded;

* How to apply;

* The settlement process;

* Post-settlement procedures;

* Treatment of unresolved cases; and

* The precedential value of settlement agreements.

The permanent TE/GE FTS was effective as of Sept. 4, 2012. Taxpayers may apply for the program by submitting Form 14017, Application for Fast Track...