Settlement Process

If the case is accepted in FTS, the FTS AO:

Contacts the GM (or examiner) and the taxpayer to set up an FTS session to discuss case resolution.

Holds the FTS session at the date and location agreed to by both parties.

Meets with the taxpayer, the GM (or designee) and the examiner at the FTS session.

Serves as a neutral party at the FTS session.

Doesn’t perform in a traditional Appeals role but uses dispute resolution techniques to facilitate settlement between the parties.

Both parties can withdraw at any time during the FTS process. A party wishing to withdraw must provide written notice to the FTS AO and other party.

At least one person with decision-making authority from both the taxpayer and IRS must be present during the FTS session.

The FTS Session may also include other individuals with decision making authority, information, and expertise to assist the parties during the settlement process.

The FTS AO may ask the taxpayer and the examiner to limit the number of participants at the FTS Session to facilitate the process.

IRS employees, the taxpayer, and persons invited to participate by the IRS, or the taxpayer must not voluntarily disclose information about any communication made during the FTS Session, except as provided by statute.

Before the FTS Session, the FTS AO will advise the participants of the procedures and establish ground rules.

The FTS Session may include joint sessions with all parties, separate meetings, or both as determined appropriate in the FTS AO’s judgment.

The FTS AO may modify the rules and procedures during the FTS Session to adapt to changes in circumstances.

The taxpayer is not required to have a representative to participate in the FTS process, but if they do, this individual must have a valid power of attorney from the taxpayer (Form 2848, Power of Attorney and Declaration of Representative).

During the FTS Session, the FTS AO will prepare the FTS Session Agenda and the FTS Session Report and provide both parties with copies.

The FTS Agenda guides the communication in the FTS Session, sets the order of issue discussion, and poses questions to clarify the issues.

The FTS Report includes a list of all issues approved for the FTS program, a description of the issues, the amounts in dispute, conference dates, a plan of action for the FTS Session and other information useful to the process as determined by the parties and the FTS AO.