SECTION 6. SETTLEMENT

PROCESS

1. In General. SB/SE FTS employs various alternative dispute resolution techniques to promote case resolution. An Appeals Officer trained in mediation (FTS Appeals Official) will serve as a neutral party, acting as a mediator and using dispute resolution techniques to facilitate agreement between the parties. The impartiality of the FTS Appeals Official and the willingness of all parties to cooperate are vital to the success of the SB/SE FTS process.

2. FTS Session (1) During SB/SE FTS, the taxpayer and SB/SE representatives participate in a conference (FTS Session) with the FTS Appeals Official. The taxpayer and the SB/SE representatives at the FTS Session should include individuals with decisionmaking authority and the information and expertise necessary to assist the parties and the FTS Appeals Official during the settlement process. The FTS Appeals Official may ask the parties to limit the number of participants at the FTS Session to facilitate the process. A taxpayer is not required to have a representative to participate in SB/SE FTS. If the taxpayer is represented by a person engaged in practice before the IRS, however, this individual must have a power of attorney (Form 2848, Power of Attorney and Declaration of Representative ) from the taxpayer. See section 8.02(3) of this revenue procedure.

(2) The FTS Appeals Official will coordinate the scheduling of the FTS Session for a date and location agreed to by both parties and the FTS Appeals Official.

All parties are encouraged to be flexible when setting the meeting date and location.

(3) Prior to the FTS Session, the FTS Appeals Official will advise the participants of the procedures and establish rules for the FTS Session. The FTS Session may include conferences attended by all of the parties, or separate meetings with each party, as determined appropriate in the sole judgment of the FTS Appeals Official.

3. Fast Track Session Report. The FTS Appeals Official will prepare and use a Form 14000, Fast Track Session Report, (Session Report) to assist in planning the FTS Session, to report on developments during the session, and to record and finalize the disposition of issues. The Session Report will include a list of all issues to be considered during SB/SE FTS, a description of the issues, and the amounts in dispute.

4. New Information. Generally, the FTS Appeals Official will consider only those issues outlined in the Session Report, except by mutual agreement of the parties. If either party presents new information during the FTS Session and the parties agree that the process will not be delayed beyond the goal of 60 days, the SB/SE FTS process can and should continue. If the parties determine that the process will be delayed beyond the goal of 60 days, the FTS Appeals Official will consider either terminating the session or postponing until both parties have had adequate time to review and evaluate the new information. If the FTS Session is terminated, the case is removed from SB/SE FTS and the taxpayer would have to reapply to participate in SB/SE FTS.

5. Settlement (1) In General. During the FTS Session, the FTS Appeals Official has the authority to offer settlement terms for any or all issues and may consider settlement terms proposed by either party. See Delegation Order 8–9, Authority of Appeals to Administer Alternative Dispute Resolution Procedures . If the taxpayer accepts the FTS Appeals Official’s settlement proposal, but the Group Manager rejects it, the SB/SE Territory Manager must review the Group Manager’s rejection and either concur in writing, or accept the settlement proposal on behalf of SB/SE. If the SB/SE Territory Manager concurs with the Group

Manager’s rejection of the settlement proposal, and an acceptable alternative settlement cannot be reached, the issue will be closed as unagreed. At any time, SB/SE and the taxpayer may agree to resolve the issues independent of SB/SE FTS and close the case on those terms.

(2) No Special Settlement Authority in SB/SE FTS. SB/SE FTS creates no special authority for settlement by the FTS Appeals Official. Any recommended settlement by the FTS Appeals Official of an issue in SB/SE FTS shall be subject to the procedures that would be applicable if the issue were being considered by Appeals, including procedures in the Internal Revenue Manual and existing published guidance. For example, if the SB/SE FTS issue is coordinated in either the Technical Advisor Program or the Appeals Technical Guidance program, the proposed settlement of that issue is subject to established procedures, including submission of the proposed settlement to the Appeals Coordinator for review and concurrence.

(3) Resolution of Disputed Issues. If the parties resolve any of the disputed issues by the conclusion of the FTS Session, the parties and the FTS Appeals Official shall sign the Session Report acknowledging acceptance of the terms of settlement. Although the signature of the parties on the Session Report does not constitute a final settlement and is not binding on either party, the signed Session Report represents the parties’ good faith intention to settle the issues addressed in the Session Report in accordance with the terms of the agreed upon settlement. The signed Session Report does not waive restrictions on assessment, terminate consents to extend periods of limitation, start the running of any periods of limitation, or constitute agreement to close the case. Issues settled through the SB/SE FTS process shall be closed out in accordance with section 7 of this revenue procedure.

6. Failure to Resolve Disputed Issues. If the parties fail to resolve any issue in SB/SE FTS, the taxpayer may request that the issue be heard through the traditional Appeals process. Post-appeals mediation, however, is not available for any issue considered during the SB/SE FTS process. See section 4.04(9) of Rev. Proc. 2014–63 and section 6.07 of this revenue procedure.

Bulletin No. 2017–14 1041 April 3, 2017

7. Withdrawal. Except as specifically provided above, either party may withdraw from the process at any time before reaching a settlement of any issue under consideration by notifying the other party and the FTS Appeals Official. Withdrawal with respect to any one issue under consideration has the effect of withdrawing all issues under consideration at the time of withdrawal. If either party withdraws from SB/SE FTS prior to the start of the FTS Session, the taxpayer will not be treated as having participated in SB/SE FTS for purposes of determining eligibility for post-appeals mediation. See section 4.04(9) of Rev. Proc. 2014–63 and section 6.06 of this revenue procedure.