EO - Eligibility for Fast Track Settlement

For EO, FTS can only resolve unagreed issues in the following types of examinations:

Form 990 series information returns (or Form 990-N) with exemption, foundation or qualification issues.

Forms 4720 and 4720-A.

Forms 990-T.

Forms 1040 or 1120 discrepancy adjustments.

Employment taxes, including worker classification issues not resolved through CSP.

FTS is generally unavailable for the following EO cases:

Correspondence examination cases.

Campus cases (formerly known as Service Centers). These cases aren't eligible for FTS as there is no decision-maker available to attend the session.

Cases where the taxpayer fails to respond to the IRS communications and didn’t previously submit documentation for consideration.

Listed transactions cases or abusive tax avoidance transactions (ATAT) cases.

Cases in which Appeals has no jurisdiction (e.g., IRC 6700 penalty cases).

Cases involving potential for civil or criminal fraud.

Issues designated for litigation.

Issues under consideration for designation for litigation.

Issues identified in a Chief Counsel Notice, or equivalent publication, as excluded from the FTS process.

"Whipsaw" issues (i.e., issues for which resolution with respect to one party might result in inconsistent treatment in the absence of the participation of another party).

Issues that can be resolved through other established settlement initiatives, such as, but not limited to, the Self Corrections Program, the examination Closing Agreement Program, or other programs described in Rev. Proc. 2013-12, 2013-4 IRB 313.

Cases where the taxpayer raises issues/arguments that clearly have no merit or legal sufficiency on their face.

Cases involving the failure or refusal to comply with the tax laws because of moral, religious, political, constitutional, conscientious, or similar grounds. See Treas. Reg. 601.106(b).

Tax Equity & Fiscal Responsibility Act (TEFRA) partnership cases.

Cases specifically excluded from FTS, by the IRS Commissioner, Chief Counsel or by a Director in EO/GE.

Selected initiatives as determined by the individual Directors on an annual basis.

Rebate claim cases.

In revocation cases, the issue of a retroactive effective date of revocation isn't eligible for FTS. IRC 7805(b) governs relief from retroactive application of adverse determination, which requires a request for a technical advice memorandum. See Rev. Proc. 2019-2, 2019-01, IRB 230, (updated annually).