IRS “fast track settlement” program - Small businesses, self-employed individuals 

November 7: The IRS announced that a “fast track settlement” program is formally available for all eligible small business and self-employed individual taxpayers. This program was initially launched as a pilot program in September 2006.

According to the IRS release (IR-2013-88, November 6, 2013), the fast track settlement program enables small businesses and self-employed individuals who are under IRS examination to expedite a settlement of tax disputes with the IRS.

The IRS announced that the fast track settlement program for small businesses and self-employed individuals is modeled on a similar program available to large and mid-size businesses (i.e., with more than $10 million in assets).

The fast track settlement program uses alternative dispute resolution techniques to save time and avoid a formal administrative appeal or lengthy litigation—with a goal for audit issues to be resolved within 60 days, rather than months or years.

This new fast track settlement program:

  • Is jointly administered by Small Business / Self-Employed (SB/SE) division of the IRS and the IRS Appeals office
  • Is designed to expedite case resolution
  • Allows taxpayers under examination with issues in dispute to work directly with IRS representatives from SB/SE’s Examination division and Appeals to resolve the issues, with the Appeals representative typically serving as mediator
  • Can be initiated before a 30-day letter is initiated

KPMG observation

Tax professionals report that many large and mid-size business taxpayers have benefited from the LB&I fast track settlement program, and that small business and self-employed taxpayers similarly may find the program to be beneficial for resolution of their tax disputes, particularly in light of the fact that taxpayers that opt to participate in fast track settlement do not forfeit any of their rights to go before IRS Appeals—even if the fast track settlement process ultimately is not successful.

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