Identify the program and case stage
A business with an unresolved examination issue may benefit from discussing Fast Track Settlement before the case moves through the ordinary administrative appeal process. The IRS describes the small-business program as a way for Exam, the taxpayer, and Appeals mediation personnel to work toward resolution while the case remains in Exam's jurisdiction. It is a voluntary dispute-resolution option, not a ruling that either side's position is correct.
Determine which IRS operating division handles the case and which program actually applies. Collection mediation and post-Appeals mediation are different procedures. Review the current eligibility requirements and procedural updates rather than using an old checklist copied from another case. A request should identify a developed, eligible dispute rather than use mediation to avoid supplying basic records.
Work a disputed-expense scenario
Assume an examination disputes $120,000 of operating deductions. The parties agree on the underlying invoices and business activity but disagree about the supported allocation between deductible services and capital work. The business's advisor identifies factual and legal uncertainty and prepares a range of potential results, including full disallowance, full acceptance, and an intermediate supported allocation.
At an illustrative 21% rate, the disputed deduction represents $25,200 of regular tax before penalties, interest, and other interactions. Management should compare the cost and uncertainty of continued dispute with a supported settlement, without assuming mediation simply cuts the proposed tax in half. The hypothetical supplies a negotiation framework, not a prediction of what an Appeals mediator or examiner will accept.
Use the current pilot procedures
Announcement 2025-6 introduced pilot changes, and September 2026 IRS interim guidance updated the small-business procedures. Among the described changes, individual eligible issues can be considered even where another issue in the case is ineligible, and the earlier mandatory pre-FTS managerial conference was removed. Check current applicability rather than rejecting the program solely because one unrelated issue is outside it.
The guidance also addresses review and explanation of denied requests and a limited Last Chance FTS pilot. Those procedural opportunities do not establish automatic acceptance or settlement. Coordinate the request through the examination process using current instructions. The September 2026 guidance changes internal submission procedures, so avoid following an obsolete direct-email instruction without confirming the current route.
Prepare a useful mediation record
Organize the examination position, taxpayer response, agreed facts, disputed facts, relevant authority, and supporting exhibits. Identify the people who understand the transactions and those authorized to consider a settlement. A short issue summary with traceable documents is more usable than an unreviewed file dump or a presentation repeating only management's preferred conclusion.
Model the consequences of possible resolutions, including future basis, deductions, credits, and related years. Determine beforehand who can approve terms and how quickly they can consult counsel or management. Preserve professional advice and privilege decisions appropriately. Do not assume every internal planning document should be circulated to all participants merely because mediation involves a cooperative discussion.
Retain the actual application and acceptance or denial with its dates, so the file distinguishes a proposed request from an approved mediation process.
Keep the goal and deadlines realistic
The IRS describes a goal of resolving small-business Fast Track cases within 60 days after acceptance. Treat that as a program goal rather than a guaranteed completion date or a reason to stop monitoring the account. Maintain the actual examination, filing, payment, and statutory court calendars. A mediation request does not make an approaching deadline disappear.
If the matter does not settle, understand the remaining administrative and judicial routes with the advisor. Keep a record of unresolved issues and submissions needed for the next stage. Continue current-year compliance and preserve the tax reserve under an adverse scenario. Management should approve participation with awareness that mediation can consume time and professional fees without producing an agreement.
Document any final resolution
Review the signed settlement documents and resulting calculations, then reconcile the tax account and later-year schedules. Identify which issues were resolved and which remain open. The useful action is an informed request for a current, eligible mediation process backed by developed facts and clear authority, giving the business a practical resolution opportunity without treating program participation as substantive approval or a guaranteed discount.
Sources & further reading
Consult the original guidance and its effective dates. These references support the educational discussion; their application depends on the specific facts.