IRS Tries to Expedite Taxpayer Settlements

The Internal Revenue Service is aiming to provide more Fast Track Settlements to small businesses and self-employed taxpayers and retool its Offer in Compromise mediation and arbitration procedures.

The IRS released Announcement 2011-05 on Thursday, providing an opportunity for small business and self-employed taxpayers to use the Fast Track Settlement process to expedite case resolution within the IRS's Small Business/Self Employed organization in certain locations. They include Chicago, Ill.; Houston, Texas; St. Paul, Minn.; Philadelphia, Pa.; central New Jersey, and San Diego, Laguna Niguel, and Riverside, Calif.

Additional locations may be identified and added to this program by mutual agreement between SB/SE and the Office of Appeals. The SB/SE FTS will enable SB/SE taxpayers that currently have unagreed issues in at least one open year under examination to work together with SB/SE and the Office of Appeals to resolve outstanding disputed issues while the case is still in SB/SE jurisdiction.

The IRS simultaneously issued Announcement 2011-06, which extends a two-year test of the mediation and arbitration procedures for Offer in Compromise and Trust Fund Recovery Penalty cases that are under the jurisdiction of the Office of Appeals until Dec. 31, 2012.

The IRS said alternative dispute resolution programs are consistent with its efforts to improve tax administration and enhance customer service. Appeals will seek appropriate OIC and TFRP cases for both mediation and arbitration during the test period in order to evaluate the effectiveness of alternative dispute resolution for such cases.

During the extended test period, Appeals will continue to offer mediation and arbitration for OIC and TFRP cases for taxpayers whose appeals are considered at an Appeals office located in one of the following cities: Atlanta, Ga.; Chicago, Ill.; Cincinnati, Ohio; Houston, Texas; Indianapolis, Ind.; Louisville, Ky.; Phoenix, Ariz.; and San Francisco, Calif.

Appeals may expand the availability of this program to other locations during the two-year extension. Upon completion of the test period, Appeals will evaluate the program, consider the necessary adjustments to both the mediation and arbitration components of the program, and determine whether to make the arbitration component permanent.

Both Announcement 2011-05 and Announcement 2011-06 will appear in Internal Revenue Bulletin 2011-04, dated Jan. 24, 2011.