Announcement 2025-6 describes a pilot program testing changes to the Fast Track Settlement (FTS) programs currently available to taxpayers under examination in the Large Business and International (LB&I), Small Business/Self-Employed (SB/SE), and Tax Exempt/Government Entities (TE/GE) operating divisions. FTS enables taxpayers with unagreed issues in at least one open tax year under examination to work with the IRS and the Independent Office of Appeals to resolve disputed factual and legal issues while the case is still under the jurisdiction of the Examination Division. The pilot program also includes changes to Post Appeals Mediation (PAM) procedures and introduces a “Last Chance FTS” pilot program for SB/SE taxpayers.

Background of FTS and PAM

FTS began as a pilot program in 2001, with the goal of using dispute resolution techniques to promote earlier issue resolution. See Notice 2001-67, 2001-2 C.B. 544.
In 2003, the IRS formally established FTS for taxpayers under the jurisdiction of the Large and Mid-Size Business division (a predecessor to LB&I). See Rev. Proc. 2003-40, 2003-25 I.R.B. 1044.
In 2012, the IRS permanently established the FTS program for taxpayers under the jurisdiction of TE/GE. See Announcement 2012-34, 2012-36 I.R.B. 334.
The SB/SE FTS program was formally established in 2017. See Rev. Proc. 2017-25, 2017-14 I.R.B 1039.
The PAM program allows taxpayers and Appeals to resolve disputes through non-binding mediation while a taxpayer’s case is still under consideration by Appeals. See Rev. Proc. 2014-63, 2014-53 I.R.B. 1014 and section 7123(b)(1) of the Internal Revenue Code.

Pilot Program Changes

The pilot program incorporates existing FTS and PAM guidance, except where specifically revised by the announcement.

Issue Eligibility: FTS can now be applied to one or more issues in a case. Previously, if one issue was ineligible for FTS, the entire case was ineligible.
Participation in FTS and PAM: Participation in FTS will not disqualify a taxpayer from PAM.
Denial of Requests: Requests to participate in FTS and PAM will not be denied without the approval of a first-line executive. These executives include:
- For Appeals: Director Examination Appeals, Director Collection Appeals, Director Specialized Examination Program & Referrals.
- For LB&I: Director, Field Operations.
- For SB/SE: Area Director, Field Examination; Director, Specialty Tax.
- For TE/GE: Director Exempt Organizations (EO) Examinations; Director EO Rulings & Agreements; Director Government Entities; Director Employee Plans (EP) Examinations; Director EP Rulings & Agreements.
Explanation for Denials: Taxpayers will receive an explanation when requests for FTS or PAM are formally denied.
Pre-FTS Managerial Conference: The pilot program removes the pre-FTS managerial conference requirements for SB/SE and TE/GE taxpayers. See IRM 8.26.2.5(1) (06-23-2017); IRM 8.26.7.2.1(1) (03-28-2014).

These changes aim to extend the provisions of the current FTS and PAM programs to a wider range of cases and to increase usage and oversight of ADR within the IRS. The changes will be evaluated after a two-year test period to determine if they should be discontinued, adjusted, or made permanent.

Last Chance FTS Pilot Program

This limited-scope pilot program applies when an SB/SE taxpayer submits a protest in response to a 30-day or equivalent letter.
The SB/SE Group Manager will ask Appeals to contact the taxpayer to inform them of the FTS option.
A designated Appeals point-of-contact will act as a neutral resource, independent of the SB/SE examination staff, and will provide information about FTS.
If the taxpayer requests FTS and the SB/SE examination team consents to participate, the rules of traditional FTS, as modified by the FTS pilot, will apply.
If the taxpayer chooses not to request FTS, the case will be transferred by SB/SE to Appeals using existing procedures.
The goal of the Last Chance FTS pilot program is to determine whether FTS participation increases when taxpayers are reminded of their FTS options prior to the case entering Appeals’ jurisdiction.

Effective Date and Expiration

The FTS and PAM pilot program changes are effective for all FTS requests made on or after the release date of the announcement (January 15, 2025) and expire two years after the release date.
The Last Chance FTS pilot program is effective beginning on the release date of the announcement (January 15, 2025) and expires two years after the release date.

Comments

The IRS encourages taxpayers to submit written comments on the changes being piloted, including suggestions for improvements. Comments can be submitted electronically or by mail.

Drafting Information The principal author of this announcement is Robin Ferguson of the Office of the Associate Chief Counsel (Procedure and Administration). For further information, contact Robin Ferguson at (202) 317-5217 (not a toll-free number).

Prepared with assistance from Notebook LM

Download Announcement 2025-6 at https://www.irs.gov/pub/irs-drop/a-25-06.pdf