SECTION 3. CASE ELIGIBILITY AND

EXCLUSIONS

.01 The parties should initiate FTS only after the Service issues the Form 5701 ( No- tice of Proposed Adjustment ) and the taxpayer provides a written response, but before the date on which the Service issues the first letter of proposed deficiency which allows the taxpayer an opportunity for administrative review in the Office of Appeals (30-day letter). Notwithstanding the issuance of a Form 5701 and the receipt of a written response from the taxpayer, the Appeals and LMSB Fast Track Program Managers (collectively, Fast Track Program Managers) shall accept an issue into the FTS program only if they are satisfied that the issue is sufficiently developed to permit resolution within the framework of the FTS program.

.02 FTS is generally available for all cases within LMSB Compliance jurisdiction. In addition, the Fast Track Program Managers and the Compliance manager from a Service Operating Division other than LMSB may agree to include a taxpayer or issue not under LMSB jurisdiction in the FTS program, depending on the circumstances and operational needs of the case. For example, SBSE Examination Specialization and Abusive Schemes cases may be accepted in the FTS program upon agreement of the Fast Track Program Managers and the SBSE manager. The taxpayer must also agree to the inclusion into the FTS program. FTS is not well suited for all cases, however, so the respective managers and the taxpayers must evaluate their individual circumstances to determine if the FTS program meets their needs, e.g., whether the number of issues is manageable within a 120 day time frame. For nonLMSB cases or issues accepted into the FTS program, the appropriate Compliance

manager in the non-LMSB Operating Division will carry out the responsibilities of the LMSB Team Manager under this revenue procedure. An issue that is excluded from a similar alternate dispute resolution program in another Operating Division, such as the SBSE - Appeals Fast Track Mediation Procedure, usually also will be excluded from the FTS program.

.03 The following issues are not eligible for inclusion into the FTS program:

1. issues in a taxpayer’s case designated for litigation;

2. issues in a taxpayer’s case under consideration for designation for litigation;

3. issues for which the taxpayer has submitted a request for competent authority assistance;

4. issues for which the taxpayer has requested the simultaneous Appeals/ Competent Authority procedure described in section 8 of Rev. Proc. 2002–52, 2002–31 I.R.B. 242, or the corresponding provision of any successor guidance;

5. issues outside LMSB jurisdiction, except as permitted under section 3.02;

6. “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;

7. issues for which mediation would not be consistent with sound tax administration, e.g., issues governed by closing agreements, by res judicata, or by controlling precedent; and

8. issues that have been identified in a Chief Counsel Notice, or equivalent publication, as excluded from the Fast Track Settlement process.

If an issue is determined not to be eligible for the FTS program, all issues in the case shall not be eligible for the FTS program.