Audits undertaken by the IRS are not only daunting but also take time before it can be finished. After one audit is done, you have to decide if you are going to pay the bill or make a dispute. Choosing the latter route can be time consuming, not to mention expensive. You can make a dispute regarding the result of the audit by the IRS through the IRS Appeals or you can choose to argue the matter at the Tax Court. Do not expect things to go along smoothly and fast and you should be prepared with the accompanying legal and accounting fees as a result of the process.
There is now good news because IRS has launched a new program wherein the process will be faster and less expensive. They refer to it as the Fast Track Settlement but it is not a new program, what is new is that it has been recently launched to the public.
With the help of Fast Track Settlement, audit disputes can be settles in as fast as 60 days which usually takes years. This mechanism is an alternative way to resolve dispute which is done right within the system of IRS. The normal process of disputing starts with a protest which usually takes months and some even years before they are pointed to proceed to the Appeals division of the IRS to schedule a hearing together with the Appeals Officer and then both parties can either settle the matter or go to court. The process alone can be very tiresome.
Fast Track Settlement has been in the IRS for a while now under Large Business & International Unit (LB&I) but it can only be accessed by complex audit cases. In the middle of 2000s, there were a number of small taxpayers that have been able to participate in the process. Recently, IRS decided to include all taxpayers that are under the Small Business/Self-Employed or SBSE division. This is the division that is responsible in handling majority of the audits from small businesses as well as individuals but not including the wealth squad audits of the agency. This is why it is important for taxpayers to have a tax investigation insurance to be covered in cases such as this.