IRS Fast-Track Settlement Lawyer

Fast-Track Settlement (FTS) Allows US Taxpayers to Avoid the IRS Appeals Process

Entering into a fast-track settlement (FTS) allows taxpayers to resolve tax disputes with the Internal Revenue Service (IRS) early in the audit process. While resolving an IRS audit via a fast-track settlement won’t make sense in all cases, when it does make sense, it can be a cost-effective means of minimizing taxpayers’ liability related to inaccurate or delinquent federal tax returns.

**Attorney Alina Veneziano**
Tax Attorney & CPA Team Lead

**Alice Campbell**
Tax Team
Former Special Agent (IRS)

When individual and business taxpayers are facing liability during Internal Revenue Service (IRS) audits, they must focus their efforts on minimizing the amount of money they have to pay to come into compliance. For many taxpayers, this will involve negotiating a fast-track settlement (FTS). From underreporting taxable income to improperly claiming credits and deductions, taxpayers can use the IRS’s FTS program to minimize their back tax, interest, and penalty liability in a wide range of circumstances.

With that said, pursuing an FTS is not an option in all cases, and the IRS is not required to consider taxpayers’ requests to settle.

At Oberheiden PC, our tax attorneys represent individual and business taxpayers in fast-track settlement negotiations. Our attorneys can scrutinize the IRS’s position, and we can help you make informed decisions about the proposed adjustments to seek during the FTS settlement process. We can then negotiate with the IRS regarding your (or your business’s) tax liability on your behalf, and we can target a favorable outcome that eliminates your tax debt while providing certainty for the future.

Benefits of Pursuing a Fast-Track Settlement (FTS) with the IRS

For individuals and businesses that are facing IRS tax audits, pursuing a fast-track settlement (FTS) can offer several benefits. If you are in noncompliance (or your business is in noncompliance) with the nation’s tax laws, the benefits of working with experienced legal counsel to pursue an FTS include:

1. It Takes Control Away from the IRS Agents Handling the Audit

IRS agents can raise a variety of red flags during the audit process, and they can challenge taxpayers’ returns on various grounds. However, their assessment of taxpayers’ liability isn’t always accurate, and it can be difficult to convince IRS agents to change their position once they determine that a person or business has underreported or underpaid.

Pursuing a fast-track settlement takes control away from the IRS agents handling your audit. The FTS process is handled by a trained mediator at the IRS Independent Office of Appeals. As explained in the IRS’s Internal Revenue Manual:

“FTS is designed to use the mediation skills and designated settlement authority of Appeals to resolve issues while the case is still within examination’s jurisdiction. . . . Appeals acts as a facilitator to arrive at and execute a resolution/settlement that is mutually agreed upon by both the taxpayer and the [IRS].”

But, while the FTS process is handled by an IRS Appeals officer trained in mediation, it differs from the IRS’s other alternative dispute resolution (ADR) programs in several important respects. Most significantly, the taxpayer’s case remains within the IRS’s jurisdiction (as opposed to the jurisdiction of IRS Appeals), and this minimizing the procedural burdens involved in settling a taxpayer’s bill.

2. It Can Avoid the Need for a Traditional Appeal through the IRS Appeals Office

Negotiating settlements in IRS disputes avoids the need to pursue a traditional appeal through the IRS Office of Independent Appeals. Instead of filing a formal written protest, taxpayers can present their legal arguments in an informal setting. By engaging a tax professional to provide tax advice and negotiate on their behalf, taxpayers can both streamline the resolution process and ensure that they are making informed decisions focused on protecting their interests going forward.

3. It Can Be a Cost-Effective Means of Resolution in Appropriate Cases

If you need to resolve a federal tax problem during an IRS audit, pursuing a fast-track settlement can be a cost-effective means of resolution. Negotiating an FTS can be significantly less costly than pursuing a formal petition for appeal. With that said, pursuing a fast-track settlement still won’t make sense in all cases, and taxpayers who are considering an FTS should seek experienced legal representation before doing so.

Drawbacks of Pursuing a Fast-Track Settlement (FTS) with the IRS

While pursuing a fast-track settlement offers several benefits in the right circumstances, there are also several potential drawbacks that warrant careful consideration. For example, some of the reasons why it might not make sense to pursue an FTS include:

1. There is No Guarantee that the IRS Will Settle

When a taxpayer requests a fast-track settlement, there is no guarantee that the IRS will settle. The IRS conducts around one million audits every year, and it simply doesn’t have the time or resources to negotiate in every case. Additionally, if the IRS believes that enforcement is warranted, it may simply decline to settle and pursue federal tax liens (or other means of enforcement) against the taxpayer’s business or personal property.

2. Appeals Conferences (and Litigation with the IRS) May Still Be Necessary

If a taxpayer’s efforts to secure an FTS are unsuccessful, it may still be necessary to pursue an appeal—and potentially to pursue litigation with the IRS in the US Tax Court. If the IRS rejects a business’s or individual’s settlement efforts and an appeal is unsuccessful, a petition will typically need to be filed in the Tax Court within 90 days (the deadline to file an appeal is typically 30 days after an audit).

3. Taxpayers Pursuing a Settlement Must Be Careful About What They Disclose

Fast-track settlement requires issues to be fully developed before entering into mediation; and, if a settlement is reached, the terms of the taxpayer’s settlement will be documented in a closing agreement. If a settlement is not reached, the IRS can continue to pursue enforcement. As a result, taxpayers pursuing a fast-track settlement must be very careful about what they disclose.

Alternatives to Pursuing a Fast-Track Settlement (FTS)

Another factor to consider is that while pursuing a fast-track settlement (FTS) is one potential option, there are various other potential options as well. For example, taxpayers that are facing additional liability during IRS audits may also have options such as:

Filing an Administrative Appeal with the IRS Independent Office of Appeals

Taxpayers can file an administrative appeal if necessary. However, while the goal of fast-track settlement is typically to resolve issues within 60 to 120 days, the administrative appeals process can take significantly longer.

Pursuing Alternative Dispute Resolution (ADR) with the IRS

Pursuing alternative dispute resolution (ADR) with the IRS is a middle ground between pursuing FTS and pursuing a formal appeal. Mediation can often be a good option for taxpayers facing complex issues that are not well-suited to the FTS process.

Litigating in the US Tax Court or US Court of Federal Claims

Individual and business taxpayers can also litigate tax disputes with the IRS when necessary. While this is generally a means of last resort, pursuing litigation ensures a final outcome—and it can help facilitate reasonable settlement negotiations with the IRS in many cases.

FAQs: Pursuing a Fast-Track Settlement with the Internal Revenue Service

What are the risks of facing an IRS audit?

IRS audits can pose significant risks for both individual and business taxpayers. Along with liability for back taxes, interest, and penalties, audits can also lead to enforcement efforts such as wage levies and asset seizures if taxpayers ignore (or fail to effectively respond to) post-audit notices from the IRS.

Should I engage legal counsel to help me negotiate a fast-track settlement with the IRS?

If you are considering a fast-track settlement with the IRS, there are several ways an experienced tax lawyer can help. For example, a tax lawyer can help organize the evidence you’ll need to convince the IRS to consider your FTS submission. An experienced tax lawyer will also be familiar with the rules regarding evidentiary records and procedural arguments in IRS audits, IRS appeals, and Tax Court litigation—and this can be critical for avoiding costly mistakes during the voluntary FTS negotiation process.

Can the Taxpayer Advocate Service help me resolve issues with the IRS?

While the Taxpayer Advocate Service (TAS) provides resources (such as the Taxpayer Bill of Rights) for general informational purposes, its ability to provide assistance to taxpayers is limited. The TAS cannot provide legal advice or legal representation; and, as a result, taxpayers who are facing scrutiny from the IRS will need to engage an experienced tax attorney to help them seek a favorable resolution.

Schedule a Confidential Consultation with an Experienced Federal Tax Attorney at Oberheiden PC

If you have questions about seeking a fast-track settlement (FTS) with the IRS, we invite you to get in touch. Call 888-680-1745 or contact us online to schedule a confidential consultation with an experienced federal tax attorney at Oberheiden PC.

Related pages: