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IRS initiates Fast Track Settlement pilot programs in effort to make Alternative Dispute Resolution faster and easier

January 15, 2025

WASHINGTON — The Internal Revenue Service today announced three pilot programs that will test changes to existing Alternative Dispute Resolution (ADR) programs.

IRS ADR programs are designed to help taxpayers resolve tax disputes earlier and more efficiently.

“The IRS has been revitalizing existing ADR programs as part of IRS transformation efforts in alignment with the IRS Strategic Operating Plan,” said Elizabeth Askey, Chief of the IRS Independent Office of Appeals (Appeals). “We’re committed to providing taxpayers who wish to resolve their issues without litigation a choice of effective and efficient ADR options as early as possible.”

“The IRS has historically made ADR available at various stages of the administrative process. Because ADR can be a quicker, more collaborative and cost-effective approach to case resolution, we have been working to improve ADR functionality and emphasizing its benefits,” said Michael Baillif, Director of Appeals’ ADR Program Management Office. “By increasing awareness, changing and revitalizing existing programs and piloting new approaches, we hope to make our ADR programs, such as Fast Track Settlement and Post-Appeals Mediation, more attractive and accessible for all eligible parties.”

The pilots announced by the IRS today focus on Fast Track Settlement (FTS)—a program that allows Appeals to mediate disputes between a taxpayer and the IRS while the case is still within the jurisdiction of the examination function, and Post-Appeals Mediation (PAM), a program in which a mediator is introduced to help foster a settlement between Appeals and the taxpayer. Among other things, the pilots:

  • Align the Large Business and International (LB&I), Small Business and Self-Employed (SB/SE) and Tax Exempt and Government Entities (TE/GE) divisions in offering FTS on an issue-by-issue basis. Previously, if a taxpayer had one issue that was ineligible for FTS, the entire case was ineligible. This Announcement increases ADR availability and flexibility by allowing FTS for single issues. 
  • Provide that requests to participate in FTS and PAM will not be denied without the approval of a first-line executive. This helps ensure a more consistent and deliberate consideration of FTS and PAM requests. 
  • Clarify that when requests for FTS or PAM are formally denied, taxpayers will receive an explanation for the denial. This facilitates transparency in the ADR process, even when acceptance of a request is not feasible.

Another pilot, Last Chance FTS, is a limited scope SB/SE pilot in which Appeals will call taxpayers or their representatives after a protest is filed in response to a 30-day or equivalent letter to inform taxpayers about the potential application of FTS to their case. This pilot will not impact eligibility for FTS but will simply test the awareness of taxpayers in the pilot group regarding the availability of FTS and measure the extent of participation when taxpayers are reminded of their FTS options immediately prior to the case entering Appeals’ jurisdiction.

A final pilot removes the limitation that participation in FTS would preclude eligibility for PAM. Eliminating this restriction on PAM eligibility encourages the use of ADR options.

These proposed ADR enhancements take into account recommendations from the Government Accountability Office and the Taxpayer Advocate Service, as well as input from both internal and external stakeholders who provided suggestions in response to the IRS's July 27, 2023, request for comment. The traditional appeals process remains available for all taxpayers.

Additional improvements in various ADR programs are under development and will be rolled out as they are finalized. The IRS remains committed to creating and maintaining a robust set of ADR offerings that allow taxpayers multiple options for successfully resolving their cases.

General inquiries regarding ADR can be addressed to the ADR Program Management Office at ap.adr.programs@irs.gov.  Questions or comments regarding the changes being piloted, including suggested improvements to make FTS and PAM more useful and effective, can be submitted as set forth in the Announcement 2025-06.