Fast Track Settlement Program - When & How To Use It During an Audit

FTS is an optional strategy to reach resolution when the SB/SE examiner and manager and the taxpayer have exhausted established issue resolution strategies.

For eligible cases, FTS allows taxpayers that have unagreed issues to work with SB/SE Examination and the Office of Appeals (Appeals) to resolve the issues while the case remains in SB/SE's jurisdiction.

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

The SBSE-04-0414-0010 memo provides guidance and procedures for actions an examiner and group manager (GM) must take related to FTS. The procedures will be incorporated into the Internal Revenue Manual (IRM) by April 4 of next year. 


This memorandum provides interim guidance regarding the Small Business/Self-Employed (SB/SE) Fast Track Settlement (FTS) program. Please ensure this information is distributed to all affected employees within your organization. It is effective immediately.

Both SB/SE and Appeals are committed to reducing the time it takes taxpayers to complete the examination and resolution process. FTS is an optional strategy to reach resolution when the SB/SE examiner and manager, and the taxpayer have exhausted established issue resolution strategies. The FTS process is estimated to be completed within 60 calendar days of Appeals’ acceptance of the FTS application.

For eligible cases, FTS allows taxpayers that have unagreed issues to work with SB/SE Examination and the Office of Appeals (Appeals) to resolve the issues while the case remains in SB/SE’s jurisdiction. FTS may be initiated any time after an issue has been fully developed.

Managerial involvement is required in all unagreed cases. The group manager should review the case file to ensure the taxpayer has submitted requested information and all issues are fully developed and documented. In addition, Field Examination group managers are required to make contact in person or by telephone with taxpayers and/or representatives on all unagreed cases. Office Examination group managers are required to make contact in person or by telephone with taxpayers and/or representatives to offer a group manager’s conference on cases where the taxpayer has requested their case be sent to Appeals. During conferences the group manager should discuss disputed issues with the taxpayer in an attempt to resolve the issues, obtain agreement, and limit taxpayer burden. If the issues cannot be resolved with the involvement of the group manager, the taxpayer should be informed of the following resolution options:

1. FTS for eligible cases (note: Fast Track Mediation should no longer be offered) 
2. Formal appeal with the Office of Appeals 
3. Pay the deficiency and file a claim for refund 
4. Receive a notice of deficiency and file a petition in U.S. Tax Court

There are many benefits of the SB/SE FTS program, including:

• Resolving issues at the lowest level possible by using the mediation skills and settlement authority of Appeals 
• Reducing taxpayer burden 
• Reducing overall case cycle time 
• Reducing examiner burden in successful cases by eliminating the need for extensive write up, rebuttal memorandum, etc. 
• Reducing resource needs for the Service

Attachment 1, SB/SE Fast Track Settlement, provides guidance and procedures for FTS. This guidance will be incorporated into IRM 4.10.7, Issue Resolution, by April 4, 2015.

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