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Tax Law

TE/GE Fast-track Settlement Program Becomes Permanent

In December 2008, the IRS announced a pilot program for entities with issues under examination by the Tax Exempt and Governmental Entities Division (TE/GE), providing such entities an opportunity to use Fast Track Settlement (FTS) to expedite case resolution. Announcement 2008-105. FTS allows entities to work together with TE/GE and the Office of Appeals to resolve outstanding issues while the case is still in TE/GE jurisdiction. Both factual and legal issues can be resolved using FTS. The pilot program officially expired on November 30, 2010, but TE/GE and the Office of Appeals continued to offer FTS on an unofficial basis.

Announcement 2012-34 establishes TE/GE FTS as a permanent program. The only change from the pilot program to the permanent program is the addition of another level of review for TE/GE FTS applications to accommodate the management structure of TE/GE.  FTS is generally available for cases involving income tax, exclusion of income from interest paid on municipal obligations, employment tax, estate and gift taxes, excise tax, and exemption, foundation or qualification issues.

Entities that qualify for FTS would be well advised to strongly consider using this program.  FTS is a confidential process that offers various alternative dispute resolution techniques to promote case or issue resolution. Specifically, the taxpayer and TE/GE representatives are able to meet together with a neutral FTS Appeals Official. During the FTS session, the FTS Appeals Official may propose settlement terms for any or all issues and may consider settlement terms proposed by either party. By using FTS, entities can greatly reduce the amount of resources that would otherwise be required to resolve issues through the traditional process.

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