Jones Day Presents: Large Business & International Examination Strategies: Fast Track Settlements
In the fifth installment of Jones Day's series of video presentations on the IRS's Large Business & International Division ("LB&I") exam procedures, partner and tax litigator Chuck Hodges explains how the IRS's new fast track settlement process works.
Read the full transcript below:
The IRS Large Business and International Division, or LB&I, has a great alternative dispute resolution called Fast Track Settlements. And it is a collaboration among taxpayers, exam, as well as appeals. And how it works really is that you have an unagreed issue, and exam and the taxpayer agree to utilize mediation services of appeals.
Well, when does it happen? It happens actually after the IRS issues, their NOPA, or notice of proposed adjustments, and then the taxpayer responds. Those two documents are then shared with appeals who reviews the NOPA and response and recommends a result. There are advantages to fast track settlement. A few of them, no protest, no rebuttal by exam, the resolution is supposed to happen within 120 days. There's a one-page application, and appeal still applies its hazards of litigation standard. Next, taxpayers can withdraw at any time and they retain all of their normal appeal rights should it not work out with the fast track settlement. I find the fast track settlement process to be helpful, at least in two situations. One, you've got limited disputed factual or legal issues. And then two, maybe you have a smaller dollar amount involved that you don't want to do the full-blown appeals process. In those two situations, fast track settlement may be helpful. And again, there's little risk involved because the costs are limited and you retain all of your appeal rights.
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