A primary objective of the Service is to resolve tax controversies at the lowest level without sacrificing the quality and integrity of those determinations. Alternative Dispute Resolution programs achieve this objective.

The objective of FTM is to allow SB/SE personnel and SB/SE taxpayers an opportunity to mediate their disputes with an Appeals Official acting as a neutral party. It is optional for the taxpayer, and does not eliminate or replace existing dispute resolution options, including the taxpayer's opportunity to request a hearing before Appeals.

Rev. Proc. 2003-41 formally establishes the SB/SE Fast Track Mediation (FTM) Program designed to expedite case resolution and to expand the range of dispute resolution options available to SB/SE taxpayers. The program is called "FTM Program" throughout this IRM section.

Appeals and SB/SE jointly manage and administer the FTM Program.

Appeals Officers trained in mediation work FTM cases. The mediator does not have settlement authority and cannot render a decision regarding any issue in dispute.

The taxpayer does not have the option of using a non-IRS employee as a mediator.

The entire process is estimated to take 30-40 business days . The case remains in SB/SE's jurisdiction during the entire process.

Publication 3605, Fast Track Mediation - A Process for Prompt Resolution of Tax Issues, provides information on the FTM Program and is given to taxpayers at the close of the conference with an Examining Agent/Collection Officer, or at the end of the conference with the Group Manager.

The Appeals Official serving as a neutral participant assists SB/SE and the taxpayer to understand the nature of the dispute and to reach a mutually satisfactory resolution.

The Appeals Official uses mediation techniques to focus issues and lead SB/SE and the taxpayer to self-determine the outcome of the dispute.

SB/SE is an active participant during the mediation session. Since the mediator does not have settlement authority and cannot render a decision regarding any issue in dispute, the case is only resolved when the taxpayer and SB/SE reach an agreement.

Either SB/SE or the taxpayer initiates FTM at the conclusion of an examination or certain Collection determination. The mediation session is designed to help facilitate communication between the parties and help resolve unagreed issues. Both parties must agree to mediate

To initiate the FTM process, SB/SE completes a completed Form 13369, Agreement to Mediate, and a brief Summary of Issues and forwards it to Appeals. The taxpayer is not required to submit a formal protest, but must provide a written position on the issues.

If the Form 13369 is executed by a person pursuant to a Power of Attorney executed by the taxpayer, it must express the taxpayer's grant of authority to consent to disclose the taxpayer's returns and return information by the IRS to third parties. A copy of the Power of Attorney must be attached to the agreement.

All documents submitted with the Form 13369 are available to the other party.

FTM may not be the appropriate dispute resolution process for all SB/SE taxpayers. The SB/SE Group Manager or designee and the taxpayer will evaluate their individual circumstances to determine if this process meets their needs.

The FTM process is confidential with respect to all parties pursuant to IRC 6103. Employees of the Service, and persons invited by the Service to participate in the FTM process, must adhere to the confidentiality and disclosure provisions of the Internal Revenue Code. They will not voluntarily disclose information regarding any communication made during the FTM session, except as provided by statute, such as IRC 6103, IRC 7214(a)(8), and 5 U.S.C. section 574

If the parties reach an agreement, SB/SE follows standard closing procedures. However, if an agreement is not reached, SB/SE closes the case as "Unagreed" . The case is then forwarded to Appeals and assigned to a different Appeals Officer. Either party may withdraw from the process at any time.

SB/SE and Appeals management work out local procedures to meet FTM time frames and foster effective communication between the functions.

Instead of an administrative file, the FTM case has an FTM package or "Request to Mediate" which includes the following documents:

Due to the inherent conflict that results because the Appeals mediator is an employee of the IRS, the Appeals mediator provides a statement to the taxpayer stating the following:

The mediator schedules the mediation session with the taxpayer and Compliance within 5 business days after case assignment. The mediator shares participant information with both parties and has the authority to limit the number of participants.

Standard mediation techniques and procedures are applied in the mediation session. Generally, the mediation session begins with an initial joint discussion with all parties present. Both the taxpayer and SB/SE are given ample opportunity to present their position. After the initial joint discussion, the mediator holds individual discussions with the parties.

At any time, either party may withdraw from the process prior to reaching a resolution by notifying the other party and the mediator in writing. If meaningful progress toward resolution stops, the mediator may terminate the process by notifying the taxpayer and SB/SE in writing.

Mediation by phone is not recommended since the process is dependent on interaction between the parties and the mediator. However, the mediator may consider using the phone for the mediation session when circumstances warrant.

The entire process normally takes an average of 30-40 calendar days to complete, but if requested by either party, the mediator allows a reasonable delay. Any delays are communicated to and coordinated with both parties. If the mediation session cannot be held within a reasonable amount of time, the mediator considers returning the Request to Mediate to SB/SE and advises both parties. Before returning the request the mediator discusses the case with management.

The mediator attempts to bring the parties to a mutual resolution of the issues during the mediation session. If, after a reasonable time, it is apparent the parties will not reach a resolution, the mediator considers terminating the mediation session. The taxpayer is advised the case will be closed through standard SB/SE closing procedures.

The mediator has the right to ask either party for additional information in order to have a full understanding of the issues being mediated.

A resolution reached by the parties through mediation is not binding on the parties for taxable years not covered by the agreement.

If the case is resolved at the mediation session, the mediator has the parties sign the Form 13370, Fast Track Mediator's Report. A copy of the report is provided to the taxpayer and SB/SE.

The Mediator submits the original Form 13370, Fast Track Mediator's Report to his/her manager along with a copy of the Case Activity Record (CAR). The manager initials and dates the report then submits to APS for closing.

A resolution reached by the parties does not bind the parties for taxable years not covered in the FTM process.

Once SB/SE secures the appropriate closing documents from the taxpayer, the case is closed using standard procedures.

The prohibition against ex partecommunications between Appeals Officers and other Service employees provided by section 1001(a) of the Internal Revenue Service Restructuring and Reform Act of 1998 does not apply to the communications arising in the FTM process because Appeals personnel, in facilitating an agreement between the taxpayer and Compliance, are not acting in their traditional Appeals settlement role.

At the conclusion of the mediation session, the mediator provides the taxpayer with the IRS Appeals Fast Track Mediation (FTM) Customer Satisfaction Survey, along with a return envelope. The mediator explains the need for the survey and encourages the taxpayer to complete and return it to Appeals. This survey is used to evaluate the process and capture feedback.

The mediator also does the following: