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Disputing a tax debt that’s in collection? New fast track option

The IRS’s Fast Track Settlement program has been highly successful at resolving tax disputes that arise as the result of an audit. In that program, a mediator from the IRS’s appeals division facilitates the resolution of the dispute in a process where all stakeholders are represented. The mediator has the authority of the appeals division, so any resolution can be put into place right away. This reduces the time the taxpayer spends wrangling with the IRS.

One important limitation of the FTS program is that it is only open to taxpayers whose cases are under examination; those with debts in collection aren’t eligible.

The benefits to the agency of a mediated approach — a reasonably fair resolution achieved in less time and expense — were significant enough that the IRS decided to expand them to small businesses and self-employed individuals with tax debts that are already in collection.

As a result, it created the Fast Track Mediation procedure to allow taxpayers to resolve IRS disputes on an expedited basis. It then revamped the program and renamed it the Fast Track Mediation–Collection program, or the FTMC.

Despite some IRS’s internal jargon that seemingly implies otherwise, the FTMC program is not limited to small businesses and the self-employed. Any taxpayer can try to resolve a qualifying tax bill through the FTMC.

Like the FTS program, the FTMC utilizes a mediator from the appeals division, who acts as a neutral facilitator. Cases in collection have already been adjudicated, so the scope of issues that can be brought before an FTMC mediator are limited to disputes involving offers in compromise or trust fund recovery penalties. Unlike the FTS program, the appeals mediator in the FTMC does not have the authority to render a decision; the parties must negotiate one.

If your tax debt is in collections, you have already missed several opportunities to resolve the issue favorably and should definitely consult with a tax lawyer. With that in mind the revamped FTMC is an excellent opportunity to address your concerns about trust fund recovery penalties or an offer in compromise.

If you have received a notice from the IRS that you may owe taxes, or if you have been contacted by an IRS revenue officer, please don’t hesitate to reach out for help.

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