13.1.14  Suspension of the Statutes of Limitation Under IRC §7811(d)

13.1.14.1  (10-31-2004)
Introduction to Suspension of Statutes of Limitation Under IRC §7811(d)

  1. The November 10, 2003 Commissioner's Memorandum, Taxpayer Advocate Service Statute Suspension Provisions under IRC section 7811(d), do not require Case Advocates to determine or take action to suspend the statute of limitations.

  2. Section 7811(d) requires the suspension of the applicable statutes of limitations on Application of Taxpayer Assistance Orders (Form 911) (criteria 1-7) signed by the taxpayer or his or her duly authorized representative when the request for relief involves an action described in Section 7811(b).

  3. Section 7811(b) may require the Secretary within a specified time period to release property of the taxpayer levied upon, or cease any action, take any action as permitted by law, or refrain from taking any action, with respect to the taxpayer under:

    1. Chapter 64 (relating to collection),

    2. Subchapter B of chapter 70 (relating to bankruptcy and receiverships),

    3. Chapter 78 (relating to discovery of liability and enforcement of title), or

    4. Any other provision of the law which is specifically described by the National Taxpayer Advocate in such order.

    Note:

    A filed application for assistance by the taxpayer (Form 911) will not suspend the period of limitations for filing refund claims.

13.1.14.2  (10-31-2004)
Requirements for IRC §7811(d) Statute Suspension

  1. In order for the suspension of the statute to be applicable under Sec 7811(d), the taxpayer or authorized representative must submit a signed Form 911, Application for Taxpayer Assistance Order (ATAO), or a written statement containing the information prescribed by Treasury Regulation 301.7811-1(b). The information must contain the following:

    1. Taxpayer name, identification number, and current mailing address,

    2. Kind of tax (individual, corporate, etc.) and tax period(s) involved,

    3. Description of Internal Revenue Service (IRS) action or proposed action causing or about to cause a significant hardship,

    4. IRS office and personnel involved, if known,

    5. Description of the specific hardship,

    6. Kind of relief requested, and

    7. Signature(s) of the taxpayer(s) or duly authorized representative.

    Note:

    An Unenrolled Return Preparer does not qualify as a duly authorized taxpayer representative. Check CC CFINQ for the Power of Attorney designation level.

  2. Statutes will not be suspended for Forms 911 or written statements not signed by the taxpayer(s) or his/her duly authorized representative.

  3. A Form 911 or written statement filed on behalf of the taxpayer to request Taxpayer Advocate Service (TAS) assistance or to document assistance provided to a taxpayer for record keeping purposes does not meet the provisions to suspend the statute (e.g. congressional inquiries, functional referrals, etc.).

  4. If Form 911 or written statement is a joint request relating to a joint liability, and only one spouse signs the form or written statement, refer to IRM 13.1.14.4.3, Special Situations.

  5. For assistance in determining whether IRC 7811(d) applies refer to Exhibit 13.1.14–1, Statute Suspension IRC 7811(d) Flowchart and Exhibit 13.1.14–2, Statute Suspension 7811(d) Criteria Checksheet.

13.1.14.3  (10-31-2004)
Periods of Limitation Affected by IRC §7811(d)

  1. A signed Form 911 or written statement will suspend the running of limitations periods for assessment or collection of tax under IRC §6501 and §6502. A Form 911 or written statement will not however, suspend the period of limitations for filing refund claims.

  2. The periods of limitations which are suspended under IRC 7811(d) are those which apply to the taxable periods to which the Form 911 or written statement relates or to the taxable periods specifically indicated in the terms of the Form 911 or written statement.

13.1.14.3.1  (10-31-2004)
Period(s) Suspended

  1. When the requirements for suspension are met, the applicable statute will be suspended beginning on the Taxpayer Advocate Received Date (TARD) and ending on the TAS decision date. The TAS decision date will be either:

    1. The date the Application of Assistance Order (Form 911) is denied;

    2. The date an agreement is reached with the involved function as to what should be done with the Operations Assistance Request (OAR);

    3. The date the Taxpayer Assistance Order (Form 9102) is issued; or

    4. The date the review is completed by the parties capable of modifying or rescinding the Form 9102.

    Exception:

    The statute will not be suspended when the applicable limitation period is suspended by another provision of the law and the Service's interest is protected by the initial suspension.

  2. The number of days for the suspension includes all calendar days except the day the application is received.

    Example:

    (For the suspension of ASED) A taxpayer has repeatedly contacted the campus from which he received a Notice of Deficiency disallowing his dependency exemptions and EITC on his timely filed 2001 tax return. The taxpayer feels he is entitled to both. He has tried for the last 8 months to get this resolved by calling and writing to the campus his notices came from. On March 15, 2002 (TARD), he sends TAS a signed, completed Form 911, Application for Taxpayer Assistance Order. This case meets TAS criteria and is accepted into TAS. There are no open controls. The TAS case advocate and technical advisor determine this case is to be sent to Exam via the OAR process. On April 18, 2002, Exam responds on the OAR that they will accept the taxpayer's response. The (ASED) will be updated and extended by the number of calendar days (excluding the day received) from the TARD March 15, 2005 until April 18, 2005, the date accepted by Exam. Therefore, the ASED will be suspended for 34 calendar days, from April 15, 2002 until May 19, 2002. Refer to IRM 13.1.14.4.2.1, Input of Transaction Code 971 with Action Code 99 and IRM 13.1.14.4.2.3, Updating Assessment Statute Expiration Date (ASED for procedures.

    Example:

    A Power of Attorney (POA) called ACS on October 21, 2001 and was given a deadline of December 14, 2001 to call back with information on the Form 433–A Financial Statement. The POA called on December 14, 2001 only to find out a levy was issued on November 21, 2001. There was no ACS history documenting the October 21, 2001 conversation and consequently the levy would not be released. The taxpayers are trying to secure a home equity loan, of which part of the proceeds are going to IRS to full pay the liability. A levy would have a negative impact with the loan company. The POA along with the taxpayer submitted a signed Form 911, Application for Taxpayer Assistance Order to TAS on January 15, 2002 requesting the release of the levy. The case advocate secured a copy of the Form 433–A Financial Statement along with a letter from the bank stating the taxpayers were closing on their loan soon. The case advocate faxed these documents to the ACS manager on January 22, 2002 and the levy was released that day. The CSED will be extended the number of calendar days (excluding the day received) from the TARD of January 15, 2002 until January 22, 2002, the date ACS agreed to release the levy. The case advocate submitted the case to the technical advisor for approval of the statute suspension. The statute suspension was approved by the technical advisor and manager on Form 3177, Notice of Action for Entry on Master File. The appropriate actions were then taken by the case advocate to update the CSED by the suspension period of 7 days. Refer to IRM 13.1.14.4.2.2 and IRM 13.1.14.4.2.4for procedures.

13.1.14.4  (10-31-2004)
Procedures on Suspending the Statutes of Limitations Under IRC §7811(d)

  1. TAS is required to suspend the statute on the appropriate taxpayer's account(s) meeting the requirements of IRC 7811(d) within 7 calendar days from the Taxpayer Advocate Received Date (TARD) .

  2. Contact your technical advisor to verify if IRC 7811(d) is applicable. Contact should be made in the most expeditious method (telephone or fax). Simultaneously forward a copy of the Form 911 or written statement, and a current tax module print of periods applicable to your Technical Advisor.

  3. After discussion with your technical advisor forward the completed Form 3177, Notice of Action for Entry on Master File, for his/her review. Keep a copy of the Form 3177 in the case file.

  4. After review by the technical advisor forward the Form 911 or written statement, completed Form 3177 and tax module prints to your manager for review and approval. Refer to Form 3177 instructions listed below for proper completion of this form.

  5. Within 7 calendar days from the TARD input the appropriate transaction codes on the applicable years to suspend either the ASED or CSED or if there is an open examination case an OAR to the Operating Division should be issued to input the appropriate transaction code. Refer toIRM 13.1.14 Transaction Codes to Input on IDRS when IRC 7811(d) Applies for information on the correct transaction codes to input.

  6. Document TAMIS History on all actions taken. Enter on the TAMIS History screen the "ATAO Decision Date" and enter "STASP" in the Local Use Field on the Taxpayer screen. Use of the TAMIS Local Use field for statute suspension takes precedence over all other uses of this field.

  7. Within 7 calendar days form the TARD, issue a Statute of Limitation Suspension Notification letter to the taxpayer and their duly authorized representative (unless not authorized to receive notice or communications) to inform of statute suspension action.

    Note:

    If an Operating Division has an open control on the tax period involved, contact the office or individual to inform of the statute suspension action by the TAS.

  8. If it has been determined that suspending the statute is not applicable, document TAMIS history that suspension of the statute was considered but not applicable.

13.1.14.4.1  (10-31-2004)
Computing the Suspension Period, Approval & Transaction Code Input

  1. Within 7 calendar days from the TAS decision date defined in IRM 13.1.14.3.1, Period Suspended compute the suspension period and contact your technical advisor for review.

  2. Forward current tax module transcript, copy of TAS decision, and completed Form 3177 to the technical advisor for review. Follow IRM 13.1.14.4.2.1 or IRM 13.1.14.4.2.2, Transaction Code Input on IDRS for proper completion of this form.

  3. Forward the completed Form 3177 and current tax module transcript to your manager for review and approval within 7 calendar days from the TAS decision date.

  4. Within 7 calendar days from the TAS decision date, input the appropriate transaction codes on the applicable periods to end the suspension of the statute. Follow IRM 13.1.14.4.2, Transaction Codes to Input on IDRS when 7811(d) Applies for information on the transaction codes to input.

  5. Within 7 calendar days from the transaction code (TC 550/560) input date, issue a Statute of Limitation Suspension letter to the taxpayer or authorized representative to inform of the statute suspension action.

  6. Document all actions on the TAMIS history screen.

13.1.14.4.2  (10-31-2004)
Transaction Codes to Input on IDRS when IRC §7811(d) Applies

  1. The following transaction codes (TC) will be input on IDRS to extend the statute of limitation as a result of the suspension period applicable to IRC §7811(d).

    • TC 971 with Action Code (AC) 99, Taxpayer Assistance Order

    • TC 971 with AC 98, Reversal of AC 99

    • TC 560, Waiver Extension of Date Assessment Statute Expires

    • TC 550, Waiver Extension of Date Collection Statute Expires

  2. Until Information System computer program changes, the TC 971 AC 99 and 98 will not suspend the applicable statute under IRC §7811(d). These transactions will serve as an audit trail for all IDRS users to identify accounts affected by IRC §7811(d) suspension when TC 550 and/or 560 are also present.

  3. The transaction codes will be input under the TIN and tax periods listed on the application (Form 911) or written statement.

  4. When an application or written statement is received for a joint filed tax year and both taxpayers have signed the Form 911 or written statement, the transaction codes will be input under the primary taxpayer's TIN. See IRM 13.1.14.4.3, Special Situations.

13.1.14.4.2.1  (10-31-2004)
Input of Transaction Code 971 with Action Code 99

  1. A transaction code (TC) 971 with action code (AC) 99 will be input using the taxpayer advocate received date (TARD) to show the beginning date of the statute suspension period of either the ASED and/or CSED. Input the TC 971 AC 99 within 7 calendar days from the TARD. See IRM 13.1.14.3.1, Period(s) Suspended.

  2. A request to input TC 971 AC 99 will be initiated by properly completing Form 3177, Notice of Action for Entry on Master File. The TAS case advocate will complete the Form 3177 and attach the current tax module IDRS print, and a copy of Form 911 or written statement.

  3. The completed form and attachments will be referred to your technical advisor for review via facsimile or priority mail. The technical advisor will document the review on TAMIS history.

  4. The Form 3177 must contain the following information:

    • SSN/EIN of Taxpayer

    • MFT Code

    • Tax Period

    • Name Control

    • Transaction Code

    • TARD

    • Action Code

  5. After review by the technical advisor, the Form 3177 will be forwarded to the case advocate's manager for approval. If approval is granted, the group manager will sign and date the Form 3177 in the lower right section of the form and return the referral to the case advocate.

  6. Once approval has been obtained, the case advocate will use Command Code REQ77 to input TC 971 AC 99. The case advocate will input TC 971 AC 99 on all applicable tax period(s) within 7 calendar days from the TARD..

  7. If approval is not granted, the group manager will discuss the referral with the case advocate and technical advisor and take any necessary actions.

13.1.14.4.2.2  (10-31-2004)
Input of Transaction Code 971 with Action Code 98

  1. TC 971 with AC 98 will be input using the TAS Decision Date to reverse the TC 971 AC 99 and to show the ending date of the statute suspension period of either the ASED and/or CSED. Input the TC 971 AC 98 within 7 calendar days from the TAS decision date or case closing date, whichever is earlier.

  2. A request to input TC 971 with AC 98 will be initiated by properly completing Form 3177. The TAS case advocate will complete the Form 3177 and attach a current tax module IDRS print.

  3. The completed form and attachments will be referred to your technical advisor for review via facsimile or priority mail. The technical advisor will document the review on TAMIS history.

  4. The Form 3177 must contain the following information:

    • SSN/EIN of taxpayer

    • MFT Code

    • Tax Period

    • Name Control

    • Transaction Code

    • TAS Decision Date

    • New Statute Date

    • Action Code

  5. After review by the technical advisor, the Form 3177 will be forwarded to the case advocate's manager for approval. If approval is granted, the group manager will sign and date the Form 3177 in the lower right section of the form and return the referral to the case advocate

  6. Once approval has been obtained, the case advocate will use command code REQ 77 to input TC 971 with AC 98. The case advocate will input TC 971 AC 98 on all applicable tax period(s) within 7 calendar days from the TAS decision date or case closing date, whichever is earlier.

  7. If approval is not granted, the group manager will discuss the referral with the case advocate and technical advisor and take any necessary actions.

13.1.14.4.2.3  (10-31-2004)
TC 560- Updating Assessment Statute Expiration Date (ASED)

  1. A TC 560 will be used to update the Assessment Statute Expiration Date (ASED) as a result of the suspended period. A manual computation of the ASED is required. Input the TC 560 within 7 calendar days from the TAS decision date or case closing date, whichever is earlier.

13.1.14.4.2.3.1  (10-31-2004)
Open Examination Cases (-L Freeze)

  1. On open examination cases a request for the generation of a TC 560 will be initiated by properly completing Form 5348, Examination Update. The TAS case advocate will complete the form for each tax period subject to the IRC §7811(d) suspension and attach the current tax module IDRS print, a copy of Form 911 or written statement, and a copy of the new ASED computation.

  2. The completed form and attachments will be referred to the technical advisor via facsimile or priority mail for review. The technical advisor will document his review on TAMIS history.

  3. After review by the technical advisor, the Form 3177 will be forwarded to the case advocate manager for approval. If approval is granted, the group manager will sign and date the Form 3177 in the lower right section of the form and return the referral to the case advocate.

  4. If approval is not granted, the group manager will discuss the referral with the case advocate and technical advisor and take any necessary actions.

  5. Once approval has been obtained, TAS will forward the form to the Case Processing Support Branch, by using the Operation Assistance Request (OAR) Form 12412, formerly known as Taxpayer Advocate Service Assistance Request, for IDRS input action.

  6. Both Forms 5348 and 12412 must contain the following information:

    • Social Security Number (SSN)/Employer Identification Number (EIN) of taxpayer

    • Master File Tax (MFT) Code

    • Tax Period

    • Name Control

    • New Statute Date

    • Necessary Transaction Code(s)

  7. To update the ASED, the Case Processing Support Branch will use Command Code AMSTU to input TC 560. TC 560 will be input by the Case Processing Support Branch on all applicable tax period(s) to update the ASED by the suspension period.

  8. Once the necessary action has been taken, the Case Processing Support Branch will complete Section IV of the OAR and return it to the case advocate. The case advocate should document the case history of all actions taken, if applicable, inform the revenue agent or tax auditor of the new ASED, and mail a Statute of Limitation Suspension Letter to the taxpayer or duly authorized representative.

13.1.14.4.2.3.2  (10-31-2004)
Non-Examination Cases

  1. On non-examination cases a request for the generation of a TC 560 is initiated by properly completing Form 3177. The TAS case advocate will complete the form for each tax period subject to the suspension; attach current tax module IDRS print, a copy of Form 911 or written statement, and a copy of the new ASED computation.

  2. The completed form and the attachments are referred to the technical advisor for review via facsimile or priority mail. The technical advisor should document his review on TAMIS history.

  3. After review by the technical advisor, the Form 3177 is forwarded to the case advocate's manager for approval. If approval is granted, the group manager signs and date the Form 3177 in the lower right section of the form and returns the referral to the case advocate

  4. After review by the technical advisor, the Form 3177 should be forwarded to the case advocate's manager for approval. If approval is granted, the group manager should sign and date the Form 3177 in the lower right section of the form and return the referral to the case advocate.

  5. Once approval is obtained, the case advocate will use Command Code (CC) REQ77 to input TC 560 on all applicable tax periods to update the ASED suspension period.

  6. If approval is not granted, the group manager should discuss the referral with the case advocate and technical advisor and take any necessary actions.

  7. Ensure the Form 3177 contains the following information:

    • SSN/EIN of taxpayer

    • MFT Code

    • Tax Period

    • Name Control

    • New Statute Date

    • Transaction Code(s)

13.1.14.4.2.4  (10-31-2004)
TC 550- Updating Collection Statute Expiration Date (CSED)

  1. TC 550 with Definer Code 05 is used to update the Collection Statute Expiration Date (CSED). This TC 550 should be input within 7 calendar days from the established TAS decision date. A manual computation of the CSED will be required.

  2. For cases requesting relief actions under IRC §7811(b), TAS should request approval to input TC 550 with Definer Code 05 on the taxpayer's account by properly completing Form 3177. The TAS case advocate should complete the form and attach the current tax module IDRS print, a copy of Form 911 or written statement, and a copy of the new CSED computation.

  3. The completed Form 3177 and attachments is referred to the technical advisor for review via facsimile or priority mail. The technical advisor should document his/her review on TAMIS history.

  4. After review by the technical advisor, the Form 3177 will be forwarded to the case advocate's manager for approval. If approval is granted, the group manager will sign and date the Form 3177 in the lower right section of the form and return the referral to the case advocate.

  5. Once approval has been obtained, the case advocate should use Command Code REQ77 to input TC 550 with Definer Code 05. The TC 550 with Definer Code 05 is input on all applicable tax period(s) to update the CSED by the suspension period.

  6. If approval is not granted, the group manager will discuss the referral with the case advocate and technical advisor and take any necessary actions.

13.1.14.4.3  (10-31-2004)
Special Situations

  1. If Form 911 or written statement is a joint request relating to a joint liability, both spouses should sign. In situations where only one spouse signs the form or written statement, contact the taxpayer who signed the form or written statement to determine the intent of the application.

  2. If the application is intended to provide relief to both taxpayers, obtain the original signature of the other spouse on the submitted (or a copy of) Form 911 or written statement within 7 calendar days of the original received date. An original signature of the other spouse is preferred, but a faxed signature is acceptable if received within 7 calendar days of the original (or copy of) Form 911 or written statement received date.

  3. If both signatures are not secured, contact your technical advisor.

    Note:

    TAS will not solicit the taxpayer's signature for the sole purpose of suspending the statute.

  4. Attempts to secure original signatures should be thoroughly documented on TAMIS.

13.1.14.4.4  (10-31-2004)
Statute of Limitation Suspension Notification Letter

  1. When a written request for assistance under IRC §7811(b) is received a Statute of Limitation Suspension Notification letter is mailed to applicable taxpayers and their duly authorized representative(s) within 7 calendar days from the TARD. The notification letter is mailed on cases where the "written statement" contains the required information prescribed in Treasury Regulation 301.7811-1(b).

  2. The notification letter advises the taxpayer and their duly authorized representative(s) of the statute suspension on the statutory periods of limitation to make assessments or collect assessed taxes.

  3. The letter is posted on the TAS webpage.

13.1.14.4.5  (10-31-2004)
Statute of Limitation Suspension Letter

  1. Within 7 calendar days from the transaction codes 560 and/or 550 input dates or the case closing date, whichever is earlier, issue a Statute of Limitation Suspension Letter to the taxpayer and duly authorized representative.

  2. The Statute of Limitation Suspension Letter advises the taxpayer and their duly authorized representative of the extended statute expiration dates.

    Exception:

    In the case of an open exam case, the letter will be mailed to the taxpayer and his/her duly authorized representative(s) within 7 calendar days from the returned OAR TAS receipt date.

  3. The letter is posted on the TAS webpage.

Exhibit 13.1.14-1  (10-31-2004)
Statute Suspension IRC §7811(d) Flowchart

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Exhibit 13.1.14-2  (10-31-2004)
Statute Suspension IRC §7811(d) Criteria Checksheet

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