25.6.22  Extension of Assessment Statute of Limitations By Consent

Manual Transmittal

August 26, 2011

Purpose

(1) This transmits revisions to IRM 25.6.22, Statute of Limitations, Extension of Assessment Statute of Limitations by Consent.

Background

This IRM section provides procedures for extending the assessment statute of limitations by consent agreement.

Material Changes

(1) IRM 25.6.22.1 (2) - Added citation and cross-reference to available Form 10949, Statute Extension Checksheet, used as a guide for preparing and processing consents.

(2) IRM 25.6.22.2.1 (4) - Clarified that the required 180 days remaining on the period of time for assessment for cases being transmitted to the Office of Appeals is measured on the day the case reaches Appeals, not when it is closed for transmission to Appeals.

(3) IRM 25.6.22.3 (2) - Clarified who may sign the Letter 907, Request to Extend Assessment Statute, or Letter 967, Letter Transmitting Consent Extending Period of Limitation.

(4) IRM 25.6.22.4.1 (1) - Added Form 872–EC (Revised 11-2010), Consent to Extend the Time on Assessment of IRC section 6676 Erroneous Claim for Refund or Credit Penalty, and Form 872–AP, Consent to Extend the Time on Assessment of IRC Section 6695A Penalty, to listing of available consent forms.

(5) IRM 25.6.22.4.1 (1) and IRM 25.6.22.6.17.10 - Clarified that the consent form may be modified to cover assessable penalties and provided examples of how the consent form may be changed to extend the period of time for assessment of assessable penalties.

(6) IRM 25.6.22.5.3 (1) - Corrected typographical error in text regarding "kind of tax" on consent forms for extending the period of time for assessment of withholding tax on payments to a foreign person from "withholding tax under IRC sections 1442–1464" to "withholding tax under IRC sections 1441–1464."

(7) IRM 25.6.22.5.7.1 (2) - Clarified and reinforced that a representative appointed by a taxpayer with proper grant of authority to sign a consent ceases to have authority to sign the consent upon the death of the taxpayer.

(8) IRM 25.6.22.5.10 (1), IRM 25.6.22.7.1.2 (2) and IRM 25.6.22.8.5 (1) - Updated reference for delegation of authority to sign consents from previous Delegation Order 42 to newly revised and renumbered Delegation Order 25–2, Authority to Execute Agreements to Extend the Period of Limitations on Assessment or Collection and to Accept Form 900, Tax Collection Waiver, dated July 6, 2009.

(9) IRM 25.6.22.5.10 (3) - Clarified that the consent form does not need to contain the name and title of the Division Executive provided that the consent is signed by a delegated IRS official. Clarified that until the various consent forms are revised to remove the line items for the Division Executive's name and title it is recommended (but not required) that the information regarding the executive's name and title be completed in order to avoid arguments as to the proper completion of the form and, due to the movement of personnel within the IRS, it is acceptable to let the name of the Division Executive blank until the consent is signed by the delegated IRS official at which time the name line of the Division Executive may be completed.

(10) IRM 25.6.22.5.11 (1) - Added cautionary note that if the taxpayer signs the consent but communicates, either orally or in writing, that his/her signature is predicated on some term or condition not included or specifically referenced on the consent form, that Area Counsel is to be consulted as to how to proceed.

(11) IRM 25.6.22.5.12 (1) - Added to the list of manager's responsibilities when executing consents, that for consents intending to cover TEFRA partnership items and affected items, all preceding consents, if any, for the tax period covered TEFRA partnership items and affected items.

(12) IRM 25.6.22.6.1.2 (5) - Added cautionary note that over the course of an examination a minor may reach the age of majority and is then to sign consents on his/her own behalf and the minor's age should be determined and monitored so that the initial consent and any subsequent consents are signed by the proper party.

(13) IRM 25.6.22.6.1.4 (4) - Clarified that decedent's will and codicils can be used to evidence the appointment of a party as the personal representative, if the estate of the decedent has not been submitted to a court for administration.

(14) IRM 25.6.22.6.1.4 (7) - Added cautionary note not to accept a consent to extend the period of time for assessment of the decedent's tax liability or the liability of a transferee of the decedent's estate that has been signed by a fiduciary who has already been discharged by the court having jurisdiction.

(15) IRM 25.6.22.6.3 (3) - Clarified that penalties may also be assessed against an S corporation so the statute must be protected if penalties are applicable; for example, the penalty for late filing or failure to disclose a "listed" transaction.

(16) IRM 25.6.22.6.5.1 (6), IRM 25.6.22.6.10 (5) and IRM 25.6.22.6.17.9 (4) - Clarified that for employment tax returns for periods beginning on or after January 1, 2009, single-owner limited liability companies (LLCs) will no longer be classified as disregarded entities for employment tax purposes.

(17) IRM 25.6.22.6.11 (8) - Text relating to Excise Taxes was added to address extensions of the period of time for assessing the penalty under IRC 6725 for failure to provide required information or providing incorrect information on Form 720-TO, Terminal Operator Report or Form 720-CS, Carrier Summary Report.

(18) IRM 25.6.22.6.11 (9) - Cross reference added to indicate that IRM 4.24.8, Excise Tax Handbook - Claims for Refund or Abatement is the source for information on whether or not the period of time for assessment for paid claims assessed under IRC 6206 can be extended by consent.

(19) IRM 25.6.22.6.13 (6) - Text relating to Employee Plans was revised to address preparation of consents should the trust become taxable as a result of revocation or disqualification as well as to address the elimination of Schedule P of the Form 5500, Annual Return/Report of Employee Benefit Plan.

(20) IRM 25.6.22.6.16 - Subsection added to address the use of Form 872–AP, Consent to Extend the Time on Assessment of IRC Section 6695A Penalty, used for extending the period of time for assessment of appraiser penalties.

(21) IRM 25.6.22.6.17.1 (2) - Added cautionary note that a consent signed by one transferee does not extend the period for assessment for another transferee or a succeeding transferee (a transferee of a transferee).

(22) Updated IRM subsections throughout to reference consent form revisions dated October 2009, which include TEFRA-related wording to cover partnership items and affected items and to reflect that consent Form 872-I, Consent to Extend the Time to Assess Tax As Well As Tax Attributable to Items of a Partnership, and Form 872–IA, Special Consent to Extend the Time to Assess Tax As Well As Tax Attributable to Items of a Partnership, have been designated as obsolete but are still binding if used.

(23) Deleted examples throughout IRM section of modified consent wording to be used when covering TEFRA partnership items and affected items as the consent forms revised October 2009 include the relevant wording.

(24) Deleted references and associated text throughout the IRM section but retained some legacy information pertaining to Tax Equity and Fiscal Responsibility Act (TEFRA) Subchapter S returns as a sufficient period of time has passed since TEFRA was no longer applicable to Subchapter S returns.

(25) Updated various citations throughout the IRM section to conform with requirements for IRM citations and cross-references.

Effect on Other Documents

IRM 25.6.22, Extension of Assessment Statute of Limitations by Consent, dated 3/1/2008, is superseded. This revision incorporates the following Interim Guidance Memorandums: (1) SB/SE-04–0710–031 dated July 12, 2010, the subject of which is Interim Guidance on Whether the Statute of Limitations can be Extended on Paid Claims Assessed under IRC Section 6206: (2) SB/SE-25–0910–050, dated September 15, 2010, the subject of which is Interim Guidance for Extending the Statute of Limitations for Form 720-TO - Terminal Operator Report and Form 720-CS - Carrier Summary Report Returns; and (3) SBSE-20-0111-001 dated December 30, 2010, the subject of which is Procedures for Implementing IRC Section 6676 Penalty for Erroneous Claims for Refunds or Credits.

Audience

Appeals, Large Business and International (LB&I), Small Business and Self-Employed (SB/SE), Tax Exempt and Governmental Entities (TE/GE), and Wage and Investment (W&I) employees

Effective Date

(08-26-2011)


Duane M. Gillen
Director, Examination Policy, SB/SE, SE:S:E:EP

25.6.22.1  (08-26-2011)
Introduction

  1. This section discusses extensions of the period of time for assessment of tax by consent. The Internal Revenue Code (IRC) provides that the statutorily-prescribed period for assessment of tax may be extended, except for the estate tax imposed by Chapter 11, if both the Secretary and the taxpayer agree to do so in writing. This written agreement by the taxpayer and the Service to extend the period of time for assessment of tax is often referred to as an "extension" or "statute extension" . The agreement is also often referred to as a "consent" .

  2. Form 10949 (Rev. 12-2009), Statute Extension Checksheet, is a job aid which provides information on preparing and processing consents; however, the job aid is not a substitute for, nor does it take precedence over, the provisions of IRM 25.6.22.

  3. The extension of the period for assessment will be secured only in cases involving unusual circumstances. The need for the extension should be clearly identified before it is solicited. When the assessment statute date has been determined and additional time is required to complete the examination or administrative processing of a case, an extension must be secured or other action must be taken to protect the interests of the Government.

  4. In order to be valid, the consent form evidencing the agreement to extend the period of time to assess tax must be executed by both the taxpayer and the Service before the statutory period for assessment expires. The period initially agreed upon for assessing tax may be extended multiple times by the parties executing additional consent forms before the period of time prescribed in the preceding consent expires.

  5. Waivers of restrictions on assessment, such as Form 4549, Income Tax Examination Changes, or Form 870, Waiver of Restrictions on Assessment and Collection of Deficiency in Tax and Acceptance of Overassessments, are not consents to extend the period of time to assess tax and the taxpayer's execution of these forms does not extend the period of time to assess tax.

  6. The IRC sections which provide for extending the period of time to assess tax by agreement are as follows:

    IRC Sections Which Provide for Extending Time for Assessment by Agreement
    IRC 6501(c)(4) — Extension of time to assess tax
    IRC 6901(d) — Extension of time to assess tax against a transferee
    IRC 6229(b) — Extension for TEFRA (Tax Equity and Fiscal Responsibility Act) partnership items (or affected items) and, for taxable periods beginning before 1/1/97, extensions for Subchapter S items (or affected items) for TEFRA S corporations

  7. This IRM section is organized as follows:

    Organization of IRM 25.6.22
    22.1 Introduction
    22.2 Guidelines to be used to determine if and when extensions are to be solicited
    22.3 Notification of Taxpayer's Rights
    22.4 List of consent forms and associated letters
    22.5 General guidelines used to prepare extensions of the period for assessment for all entities and types of tax
    22.6 Instructions used to prepare extensions of the period for assessment in specific situations and types of tax
    22.7 Open-ended consents
    22.8 Guidelines pertaining to restricted consents

    Note:

    References in IRM 25.6.22 to "flow-through" should be read as also referring to "pass-through" and, for purposes of this IRM section, can be used interchangeably.

25.6.22.2  (08-26-2011)
Guidelines for Soliciting Extensions

  1. The following guidelines will be used in determining if an assessment statute extension should be requested from the taxpayer.

25.6.22.2.1  (08-26-2011)
Assessment

  1. It is the policy of the Service to secure consents to extend the period of time to assess tax only in cases involving unusual circumstances. See Rev. Proc. 57-6, 1957-1 C.B. 729. Every attempt should be made to resolve cases before it is necessary to extend the statute of limitations. If it is necessary to extend the statute, the period of extension should be no longer than is necessary to complete the examination and other administrative actions.

  2. An examiner must obtain the approval of his/her group manager before requesting that a taxpayer execute a consent. The following conditions warrant soliciting a consent to extend the statute of limitations. This list is not all inclusive and in rare circumstances consents can be solicited before the 180–day time frame specified below but the case file must be documented by the Group/Team Manager with the reasons approval to extend the statute was granted for situations other than those listed:

    1. The limitation period for the taxable year under examination will expire within 180 days and there is insufficient time to complete the examination and the administrative processing of the case.

    2. The examiner discovers firm indications that substantial additional tax is due for prior periods and the statute of limitations for any of the prior periods will expire within 180 days and there is insufficient time to complete the examination and administrative processing of the case.

      Note:

      An examiner cannot initiate an examination on any return with less than 12 months remaining on the statute of limitations for assessment, without prior managerial approval.

    3. The limitation period for the taxable year under examination will expire within 180 days and the taxpayer has requested that the case be sent to Appeals.

    4. The limitation period for the taxable year under examination will expire within 180 days and the case is included in the Coordinated Industry Case (CIC) Program under the provisions of IRM 4.46.1, Overview of LMSB Guide for Quality Examinations, or involves a case in which the Form 6658, Notice of Special Investor Action, procedure is applicable. This form is used as a transmittal to send a copy of a K-1 to the Field/Campus TEFRA Function when an investor is manually linked to a flow-through entity.

    5. The limitation period will expire within 210 days for a case that will be (or has been) placed in suspense.

    6. The limitation period to assess preparer penalties or appraiser penalties will expire within 180 days and there is insufficient time to complete the examination and process the return preparer penalty case or the appraiser penalty case.

    7. A joint investigation with the Criminal Investigation Division is in progress and there is the likelihood that the work can not be completed before expiration of the statutory period for assessment (see IRM 25.6.22.6.17.8, Fraud - Criminal, and IRM 25.1.4.3.6, Statute Protection, for further instructions).

  3. A consent should not be requested in any case in which no previous contact has been made with the taxpayer, except where compelling tax administration reasons exist to justify the request for the consent. For example, consistent treatment of related taxpayers would be a compelling tax administration reason.

  4. A case must not be sent to Appeals with less than 180 days remaining before the expiration of the statutory period for assessment on the day the case reaches Appeals.

  5. It is the Service's practice to keep the statutory period of limitations open on all returns that the Joint Committee has under consideration, including returns recommended for survey action. The examiner should make every effort to obtain consents extending the period of limitations on all returns (including carryback and claim returns) directly involved in a Joint Committee case (including the non-reportable tax periods included in the Revenue Agent's Report) where the statutory period will expire within:

    1. 12 months from the time the case is submitted to the Joint Committee reviewer or

    2. 6 months from the date the report is transmitted to the Joint Committee Program Manager in Headquarters.

  6. In the situation when a case has been referred to the Criminal Investigation function or is under joint investigation with Criminal Investigation, the primary responsibility for protecting the civil statute for assessment is that of the examiner charged with the return(s). Before a request is made to the taxpayer to extend the statute, written agreement from Criminal Investigation must be obtained. Consult IRM 25.6.22.6.17.8, Fraud - Criminal, and IRM 25.1.4.3.6, Statute Protection, for procedures for soliciting consents involving joint investigation cases.

  7. If examination issues indicate that gross income was understated by more than 25% and the 6–year statute may apply, the normal 3–year statutory period for assessment should be extended, if the normal statute still has time remaining. If the examiner lets the normal 3–year period for assessment expire because of reliance on the omission of gross income being more than 25% of the amount of gross income stated in the return but it is ultimately determined the understatement is 25% or less, the Service would be barred from assessing the tax deficiency, absent some other exception to the normal period for assessment.

  8. Claims for refund do not extend the statutory period for assessing additional tax. Therefore, an open assessment statute should be protected and a consent obtained, if the statute is within the above-specified time periods unless (9), immediately below, applies.

  9. If it has been determined that there is no need to protect the assessment statute because there is no potential for additional tax to be assessed, this determination is to be reflected on the Form 895, Notice of Statute Expiration, signed or initialed and dated by the examiner and the manager. This determination could pertain to cases involving claims for refund and carryback tax periods. See IRM 25.6.23, Exhibit 25.6.23–3, Instructions for Updating the Statute on AIMS, for proper alpha coding of the assessment statute expiration date (ASED).

  10. In cases previously closed and reopened by taxpayers through the filing of claims for refund, the taxpayer should not be routinely requested to agree to a consent to extend the period of time for assessment unless new information or the re–examination of the return indicates that a redetermination of the tax liability may result in tax deficiencies.

    Note:

    The claim for refund amount can be offset by additional taxes attributable to adjustments discovered through the re–examination process after the period for assessment has expired.

  11. If the period for assessment is open as a result of a consent but closing action will not be completed within the time periods specified in the existing consent, another consent must be obtained to further extend the statute. In this case, the earlier consent(s) must always be retained in the case file and safeguarded. These consents provide the proof that the statute was still open at the time a later consent was executed.

25.6.22.3  (08-26-2011)
Notification of Taxpayer's Rights

  1. As a result of an amendment of IRC 6501 by the IRS Restructuring and Reform Act of 1998 (RRA 98), the Service must notify the taxpayer of the following rights each time when a request is made to the taxpayer to consent to extend the period of time for assessment (effective for requests made after 12/31/99):

    1. The right to refuse to extend the period of time for assessment.

    2. The right to request that the extension be limited to particular issues.

    3. The right to request that the period for assessment be limited to a particular period of time, i.e., to a specific date.

  2. The notification should be made to the taxpayer (see IRM 25.6.22.3.1, Separate Notification of Each Spouse, for joint return situations) and the taxpayer’s properly authorized representative, if any, unless the taxpayer has placed restrictions on providing copies to the representative, by:

    1. Mailing or presenting to the taxpayer a completed and dated Letter 907, Request to Extend Assessment Statute, or Letter 967, Letter Transmitting Consent Extending Period of Limitation, in the case of the Office of Appeals, along with the properly completed consent form, which contains the notice of taxpayers' rights, AND Publication 1035, Extending the Tax Assessment Period.

    2. If the taxpayer is represented, a copy of the same documents mailed to the taxpayer should be mailed to the properly authorized representative along with a Letter 937, Transmittal Letter for Power of Attorney. If the Letter 907/967, consent form and Pub 1035 is presented to the representative, also mail the documents to the taxpayer.

    3. There is no legal requirement that the notice of rights required by IRC 6501(c)(4)(B) be signed however the Appeals Officer/Revenue Agent/TCO/Tax Examiner/Specialist should include his/her own name in the signature block and sign Letter 907, Request to Extend Assessment Statute, or Letter 967, Letter Transmitting Consent Extending Period of Limitation, whichever is applicable.

  3. The Service employee requesting the consent will document in the case file on Form 9984, Examining Officer's Activity Record, or other appropriate form, as specified by the procedures of the particular operating division or function, that the required notification of rights was made, the date of notification, specify who was notified, and how notified, i.e., by mail or personal presentation. In the case of a joint return, also see IRM 25.6.22.3.1, Separate Notification of Each Spouse. A copy of the Letter 907 or Letter 967 will be maintained in the case file.

  4. If a taxpayer chooses to exercise his/her right to refuse to extend the statute, it will be explained to the taxpayer that a statutory notice of deficiency may be issued or other appropriate action taken in those instances when a notice of deficiency is not first necessary in order to assess tax. See Pub 1035 for more detailed discussion. Procedures will be explained to the taxpayer in a manner consistent with the Service's mission statement.

  5. If the taxpayer requests an extension period that is shorter than needed to complete the examination and other administrative actions, the Service is not compelled to agree to such period of time. Both the taxpayer and the Service have the right to determine what they will agree to in the consent.

  6. If the taxpayer requests the consent be restricted to specific items, the service is not compelled to sign such a consent in all situations. Both the taxpayer and the Service have the right to determine what they will agree to in the consent. See IRM 25.6.22.8.1, Taxpayer's Rights Concerning Restricted Consents, and see IRM 25.6.22.8.2, Situations Permitting Taxpayer's Request for Restricted Consent, for situations when restricted consents will normally be granted.

25.6.22.3.1  (08-26-2011)
Separate Notification of Each Spouse

  1. Act section 3201(d) of RRA 98 requires that, wherever practicable, any notice relating to a joint return be sent separately to each individual filing the joint return.

  2. Requests for statute extensions are notices requiring issuance of separate notices, except in those situations when it has been determined and documented in the case file that the individuals filing the joint return are residing at the same address. If both spouses are residing at the same mailing address, then:

    1. Mail or present one complete set of documents, which contains the appropriate Letter 907 or Letter 967 addressed to both spouses at the common address, a Pub 1035 and the required consent form which contains the notice of taxpayers’ rights.

    2. Document in the case activity record the date and fact of mailing of Letter 907 or Letter 967, Pub 1035 and the consent form or the date and fact of personal presentation and to whom presented.

  3. If it has been determined that both spouses are not residing at the same address, document the separate addresses and mail separately a complete set of documents containing the Letter 907 or Letter 967 addressed to the respective separate address of each spouse, Pub 1035 and consent to each spouse and document the case activity record with the date and fact of separate mailings to each spouse. If the consent is personally presented, document the date and fact of separate personal presentations or the date and fact of personal presentation to one spouse and the date and fact of mailing to the other spouse. For preparation of consents when the spouses are separated or divorced, see IRM 25.6.22.6.1.1, Joint Returns.

  4. See IRM 4.10.1.6.8.2, Verification of Address for Each Spouse, and IRM 25.15.6.2.1(1), Mailing Address Changes, for the requirements which specify that in every examination of a joint return, the examiner shall verify the last known mailing address for each spouse and document actions taken to verify the address.

25.6.22.4  (08-26-2011)
Consent Forms and Letters

  1. Various consent forms are used to extend the statutory period for assessment. There are also letters and publications sent with the assessment consent forms, which are discussed below.

25.6.22.4.1  (08-26-2011)
Assessment Consent Forms

  1. The following consent forms are used to extend the assessment statute:

    Form Description
    Form 872 Consent to Extend the Time to Assess Tax
    Used for income tax, gift tax, various excise taxes. Also, used for various assessable penalties, when a separate consent form has not been prescribed for use, if the form is modified to change the wording from "tax due" to "penalty due" . See IRM 25.6.22.6.5, Partnerships (Non-Tefra), and IRM 25.6.22.6.17.10 for examples. This form is a fixed-date extension.

    Note:

    Prior to the revision of this form dated 10–2009 (Rev. 10–2009), this form did not cover flow-through TEFRA partnership items or affected items unless modified with special language. The October 2009 revision of the form covers both TEFRA and non-TEFRA items. See IRM 25.6.22.6.5.1, Partnerships (TEFRA).


    Caution: In order for the consent to cover TEFRA partnership items or affected items, special procedures apply if the taxpayer's authorized representative signs the consent on behalf of the taxpayer, see IRM 25.6.22.5.7.1 (7), Executed by Authorized Representative.
    Form 872–A Special Consent to Extend the Time to Assess Tax
    Used for income tax, gift tax and various excise taxes. This form is an open-ended (no fixed-date) extension.

    Note:

    Prior to the revision of this form dated 10–2009 (Rev. 10–2009), this form did not cover flow-through TEFRA partnership items or affected items unless modified with special language. The October 2009 revision of the form covers both TEFRA and non-TEFRA items. See IRM 25.6.22.6.5.1, Partnerships (TEFRA).


    Caution: In order for the consent to cover TEFRA partnership items or affected items, special procedures apply if the taxpayer's authorized representative signs the consent on behalf of the taxpayer, see IRM 25.6.22.5.7.1 (7), Executed by Authorized Representative.
    Form 872-AP Consent to Extend the Time on Assessment of IRC Section 6695A Penalty
    Form 872–B Consent to Extend the Time to Assess Miscellaneous Excise Taxes
    Form 872–C Consent Fixing Period of Limitation Upon Assessment of Tax Under Section 4940 of the Internal Revenue Code (Form 872 C is only available by ordering Form 1023, Application for Recognition of Exemption Under Sec. 501(c)(3) of the Internal Revenue Code)
    Form 872–D Consent to Extend the Time on Assessment of Tax Return Preparer Penalty
    Form 872–EC Consent to Extend the Time on Assessment-Section 6676 Erroneous Claim for Refund or Credit Penalty
    Form 872–F Consent to Extend the Time to Assess Tax Attributable to Items of a Partnership That Have Converted Under Section 6231(b) of the Internal Revenue Code
    Form 872–H Consent to Extend the Time to Assess Tax on a Trust
    Form 872-I Consent to Extend the Time to Assess Tax As Well As Tax Attributable to Items of a Partnership (fixed-date extension). Caution: Special rules apply if the taxpayer's authorized representative signs the consent on behalf of the taxpayer, see IRM 25.6.22.5.7.1 (7), Executed by Authorized Representative.

    Note:

    This form was designated as obsolete on October 29, 2009, when the TEFRA-related wording was included on the Form 872; however, consents recorded on this form are still valid.

    Form 872-IA Special Consent to Extend the Time to Assess Tax As Well As Tax Attributable to Items of a Partnership (open-ended extension). Caution: Special rules apply if the taxpayer's authorized representative signs the consent on behalf of the taxpayer, see IRM 25.6.22.5.7.1 (7), Executed by Authorized Representative.

    Note:

    This form was designated as obsolete on October 29, 2009, when the TEFRA-related wording was included on the Form 872-A; however, consents recorded on this form are still valid.

    Form 872–N Notice of Termination of Special Consent to Extend the Time to Assess Tax Attributable to Partnership Items
     Used to terminate Form 872–O.
    Form 872–O Special Consent to Extend the Time to Assess Tax Attributable to Partnership Items
    Used for open-ended TEFRA partnership-level consent. Should be signed by the Tax Matters Partner or authorized official. Caution: Special rules apply if the taxpayer's authorized representative signs the consent on behalf of the TEFRA entity, see IRM 25.6.22.5.7.1 (6), Executed by Authorized Representative

    Note:

    Form 872–O is not to be used for non-TEFRA partnerships.

    Form 872–P Consent to Extend the Time to Assess Tax Attributable to Partnership Items
    Used for fixed-date TEFRA partnership-level consent. Should be signed by the Tax Matters Partner or authorized official. Caution: Special rules apply if the taxpayer's authorized representative signs the consent on behalf of the TEFRA entity, see IRM 25.6.22.5.7.1 (6), Executed by Authorized Representative

    Note:

    Form 872–P is not to be used for non-TEFRA partnerships.

    Form 872–Q Notice of Termination of Special Consent to Extend the Time to Assess Tax Attributable to Items of an S Corporation
    Designated as obsolete effective April 11, 2008.
    Form 872–R Special Consent to Extend the Time to Assess Tax Attributable to Items of an S Corporation
    Designated as obsolete effective April 11, 2008.
    Form 872–S Consent to Extend the Time to Assess Tax Attributable to Items of an S Corporation
    Designated as obsolete effective April 11, 2008.
    Form 872–T Notice of Termination of Special Consent to Extend the Time to Assess Tax
    Used to terminate Form 872–A or Form 872–IA.
    Form 872-U Change of Address to Submit Notice of Termination of Special Consent to Extend the Time to Assess Tax

    Note:

    This is a notice that relates to open-ended consents -NOT ITSELF A CONSENT FORM


    Used to notify taxpayers who have signed open-ended consents of the proper address to submit a consent termination when the IRS address has changed from that reflected on the open-ended consent form.
    Form 921 Consent to Extend the Time to Assess Income Tax
    Used to extend statute when taxpayer is granted approval to use the estimated cost of future improvements in certain real estate developments, as provided in Rev. Proc. 92–29, 1992-1 C.B. 748. The form, revised 07/2001, provides a period for assessment ending one year after the date a return is filed for the tax year in which the project is expected to be complete. The prior revision (01/2001) provided for a period of assessment ending on a date specified in the consent. For flow-through entity situations, see Form 921–I and Form 921–P, below.
    Form 921—A Consent Fixing Period of Limitations On Assessment of Income and Profits Tax
    Used to extend statute when taxpayer is granted approval to use the estimated cost of future improvements in certain real estate developments, as provided in Rev. Proc. 92–29. The form is used for an S Corporation, Partnership, Limited Liability Company, Trust, Syndicate, Pool, Etc. It provides for a period of assessment ending on a date specified in the consent. However, see Form 921-I and Form 921-P, described below, for more current usage.
    Form 921-I Consent Fixing Period of Limitation on Assessment of Income and Profits Tax (S Corporations, Partnerships, Limited Liability Companies, Trusts, Syndicates, Pools, Etc.)
    An alternative to Form 921, this form, revised 9/2001, is used by the investor in a partnership to consent to the extension of the period of time for assessment. This form should be used by investors in the electing S Corporation, Partnership, Limited Liability Company, Trust, Syndicate, Pool, etc. that are NOT subject to unified audit and litigation procedures, collectively known as TEFRA (Tax Equity and Fiscal Responsibility Act). For entities that are subject to TEFRA, use Form 921-P, described below. The form provides a period for assessment ending one year after the date a return is filed for the tax year in which the project is expected to be complete.
    Form 921-P Consent Fixing Period of Limitation on Assessment of Income and Profits Tax (Partnerships and Limited Liability Companies) Revised 10/2001 and used to apply for a consent in accordance with Rev. Proc. 92-29. This consent generally applies to TEFRA partnership returns filed for partnership tax years beginning after September 3, 1982. For other entities (those not subject to the unified audit and litigation procedures, collectively known as TEFRA)) do not use Form 921-P. The form provides a period for assessment ending one year after the date a return is filed for the tax year in which the project is expected to be complete.
    Form 952 Consent to Extend Period of Limitation on
    Assessment of Income Taxes

    Used for receiving corporation on the complete liquidation of a subsidiary under IRC 332.
    Form 977 Consent to Extend the time to Assess Liability at Law or in Equity for Income, Gift and Estate Tax Against a Transferee or Fiduciary
    Used for transferee liability cases, except for employment and excise taxes, see Form 4016, Consent Fixing Period of Limitation Upon Assessment of Employment or Miscellaneous Excise Taxes Against a Transferee.
    Form 2750 Waiver Extending Statutory Period for Assessment of Trust Fund Recovery Penalty
    Form 4016 Consent Fixing Period of Limitation Upon Assessment of Employment or Miscellaneous Excise Taxes Against a Transferee
    Used to extend statute on transferees for employment and excise taxes.
    Form SS–10 Consent to Extend the Time to Assess Employment Taxes
    Used for employment taxes – Federal Insurance Contributions Act, Federal Unemployment Tax Act, withholding taxes and Railroad Retirement Tax Act.

  2. In fiduciary situations, the following form is used to confirm a person’s authority to sign the consent:
    Form 56, Notice Concerning Fiduciary Relationship or Form 56–F, Notice Concerning Fiduciary Relationship of Financial Institution:

    1. Generally, a fiduciary should file Form 56 when the fiduciary relationship is created or terminated. Some fiduciaries file the form with the first return. Therefore, Form 56 may already be on file. If the examiner has reason to doubt that the Form 56 on file remains valid, the examiner needs to verify that the fiduciary relationship still exists or to secure a current Form 56 (dated not later than the date the fiduciary dates the consent) to ensure the fiduciary relationship still exists, in order to enter into a consent agreement.

    2. Part II of Form 56 concerns the authority for the fiduciary relationship; e.g., a will, a court order, a trust instrument. The instructions note that the fiduciary must be prepared to furnish evidence that substantiates the authority. This evidence may not be on file with the IRS. As noted below in IRM 25.6.22.6.1.2 (Minor), IRM 25.6.22.6.1.3 ( Incompetent Persons), IRM 25.6.22.6.1.4 (Decedents), IRM 25.6.22.6.6 (Trusts) and IRM 25.6.22.6.7 (Decedent's Estate (Income Tax – Form 1041)), the fiduciary is to provide the evidence of fiduciary authority when submitting the consent in order to ensure the validity of the consent. The file should contain a copy of the properly authenticated instrument under which the fiduciary derives the authority to act and which documents the fact that such authority remains in full force and effect on the date the consent is signed by the fiduciary.

25.6.22.4.2  (08-26-2011)
Letters and Publications Sent with Consents

  1. The following letters are used when consents are requested through the mail: A copy of the correspondence is to be provided to the authorized representative.

    Letter Description
    Letter 907(with various suffixes depending on operating division or Letter 967 in the case of Appeals) Request to Extend Assessment Statute — Transmittal letter sent to the taxpayer with the consent. The number of days for the taxpayer to respond to the consent solicitation is to be inserted in the Letter 907, if not already specified in the particular version of the letter being used. Generally, at least 10 calendar days from the date of the letter should be allowed for the taxpayer to respond.
    Letter 928 Request to Extend Statute – Follow-up Letter — Letter used, when appropriate, as a follow-up when consents have been previously requested but not received.
    Letter 929 Transmittal to Taxpayer of Copy of Signed Consent — After consents have been properly executed, this letter may be used to transmit a copy of the executed consent to the taxpayer for his/her records.
    Letter 1817 Letter to T/P Regarding Consents — Letter used to request additional information or send the taxpayer "new" consent forms, if it is necessary to recontact the taxpayer about a consent.

  2. Pub 1035, Extending the Tax Assessment Period, will be sent to the taxpayer in every instance when a consent is requested by mail.

  3. If a face-to-face request for a consent is made to the taxpayer or authorized representative, the consent, Letter 907 and Pub 1035 will be handed to the taxpayer or authorized representative. When orally soliciting a consent, examiners should give taxpayers or authorized representative a brief explanation of taxpayers' rights and options.

25.6.22.4.3  (08-26-2011)
Consent Forms Used for Return

  1. The following is a list of the consent forms that are used for each type of return as well as the Form 872-F, Form 952, Form 921 may be used in applicable circumstances (see IRM 25.6.22.4.1, Assessment Consent Forms ):

    Tax Form Consent Form
    Income Taxes  
    1040, 1040–A, 1040–EZ 872 or 872–A
    1041 872, 872–A, 872-H
    1042 872 or 872–A
    1065 (non-TEFRA) Protect statute of each partner using appropriate consent form.
    1065 (TEFRA) 872–P or 872–O at TEFRA entity level or 872 or 872-A, revised October 2009, at individual partner level. Prior to October 2009 revision of 872 and 872–A, 872-I or 872–IA at partner level.
    1120, 1120–A 872 or 872–A
    1120–F, 1120–FSC, 1120–DISC 872 or 872–A
    1120S (Non-TEFRA)  
     Tax (including penalties) on S corporation 872 or 872–A
     Flow-through items Protect statute of each shareholder using appropriate consent form.
       
    Excise Taxes  
    720 872–B
    730 872–B
    11C 872–B
    2290 872–B
    720–CS 872–B
    720–TO 872–B
       
    Gift Taxes  
    709 872 or 872–A
       
    Estate Taxes  
    706 Cannot be Extended by Agreement
       
    Employment Taxes and Withheld Taxes  
    940 SS–10
    941 SS–10
    943 SS–10
    944 SS–10
    945 SS-10
    Employee Share of FICA SS–10
    Trust Fund Recovery Penalty 2750
    Form 1040, FICA tax on tips not reported to employer 872, 872–A or SS-10. If Form 872 or 872-A is used, the distinct types of taxes covered by the consent must be separately specified.
    Form 1040, Household Employment Taxes 872, 872-A or SS-10. If Form 872 or 872-A is used, the distinct types of taxes covered must be separately specified
       
    Exempt Organizations  
    990 872 or 872–A
    990–C 872 or 872–A
    990–T 872 or 872–A
    990–PF 872 or 872–A
    4720 872 or 872–A
       
    Employee Plans  
    5330 872
    5500 872–H
    990–T 872
    1041 872–H
    Transferee Liability  
    Income tax 977
    Employment taxes 4016
    Excise taxes 4016
       
    Appraiser Penalty 872–AP
    Return Preparer Penalty 872–D

25.6.22.5  (08-26-2011)
Preparation of Consent Forms – General Procedures

  1. This section covers the procedures for the preparation of consents that generally apply to consents for all taxpayers and types of tax. IRM 25.6.22.6, Preparation of Consents for Specific Entities and Taxes, below deals with requirements that pertain to specific taxpayers and types of tax.

  2. A consent to extend the period for assessment is a unilateral waiver of a defense by a taxpayer and it is not a contract. Contract principles are significant, however, as IRC 6501(c)(4) requires that the parties enter into a written agreement as to the extension of the period of time to assess tax. Therefore, every effort should be made to ensure the following information is clear:

    • The terms of the agreement

    • Who is the taxpayer

    • What years are involved

    • Which individuals are authorized to sign the consent

    • Whether or not there are any conditions and/or restrictions posed by the taxpayer or the Service

  3. There are fixed–date and open-ended (no fixed–date) consents. For further information as to the date the extended period for assessment ends see IRM 25.6.22.5.6, Expiration Date, and IRM 25.6.22.7, Open-ended Consents, as well as IRM 25.6.22.4.1, Assessment Consent Forms, to determine which forms are used to prepare fixed-date consents and which forms are used to prepare open-ended consents.

25.6.22.5.1  (08-26-2011)
Preparation of Consents

  1. The consent should be typewritten or computer generated. A pen may be used, but this practice is discouraged. Never use a pencil.

  2. The consent should be prepared by the Service, not by the taxpayer or the taxpayer's representative except forms of the 921 series can be prepared by the taxpayer and submitted for acceptance under Rev. Proc. 92–29, 1992-1 C.B. 748. This Revenue Procedure pertains to the use of an alternative to the general method under IRC 461(h) by developers of real estate.

  3. Qualified extensions are not acceptable, except as provided for under the discussion of restricted consents at IRM 25.6.22.8, Restricted Consents.

  4. The consent must be prepared in duplicate. A duplicate original signed by both the taxpayer (or duly authorized representative with proper authority to do so) and delegated Service official is sent to the taxpayer. See IRM 25.6.22.5.11 (1)(e), Examiner's Responsibilities after Receipt of Consent. The original and copy must each be executed with original signatures of the taxpayers and the Service official. Carbon signatures or facsimile signatures are not acceptable.

  5. Consents with alterations, erasures, and corrections should not knowingly be provided to the taxpayer for signature, regardless of how seemingly slight or immaterial the corrections or alterations might be.

  6. If the taxpayer has made alterations on the consent, a new consent should be prepared for the taxpayer's signature. However, if the alterations on the consent are acceptable to the Service, the taxpayer has initialed each alteration, and there is not sufficient time to perfect the consent, the person signing for the Service can initial the alterations and sign the consent. Advice of Area Counsel should be sought before relying on an altered consent to protect the statute.

    Note:

    The Service will not make changes to a consent form after execution by the taxpayer.

  7. Consents that contain errors (e.g., spellings, addresses, years, identification numbers) may not necessarily render the consent invalid; however, due diligence must be exercised to avoid errors. The courts have sometimes found that where the intent of the parties was to extend the period for assessment for the appropriate taxpayer and tax period, the errors in the consent did not invalidate the extension, i.e., the court "reformed" the consent. Decisions concerning the validity of consents which contain errors are not to be made without consulting Counsel.

    Note:

    The most important factor with respect to consent preparation is that the written consent manifests the intent of the parties to extend the period of time for assessment.

25.6.22.5.2  (08-26-2011)
Taxpayer's Name

  1. The consent should be prepared and signed using the same name as that used on the return as filed, unless since filing, there has been a name change. In these situations, the consent should be prepared using both names, but the signature line should only show the current name; however, showing both the current and former names on the signature line is also acceptable.

    Example:

    Name line — "Mary Doe, formerly Mary Brown"
    Signature line — "Mary Doe"

  2. Abbreviated names, such as "Geo." , "Chas." , "Jas." , "Wm." , etc., should not be used in the name line of the consent or the signature line, unless they are used on the return in both the name and signature block. If an entity's legal name contains abbreviations, the abbreviations should be used.

  3. For Employee Plan matters, the consent must indicate the name of the plan and the plan number.

25.6.22.5.3  (08-26-2011)
Kind of Tax

  1. The following will be entered on the "Kind of Tax" line on the consent form:

    Type of Tax "Kind of Tax"
    Income "income"
    Excise tax reported on Form 1040 "excise"
    Chapter 42 and 43, IRC sections 4940 through 4980E involving tax-exempt organizations and qualified pension plans "excise"
     
     
     
    Qualified Pension Plans "income"  
    Gift Tax "gift"  
    Excise Taxes reported on Forms 720, 730, 2290, and 11–C See IRM 25.6.22.6.11 (4), Excise Tax  
     
    FICA tax on tips "FICA on tips "  
    Household Employment Tax "household employment"  
    Foreign Persons, Withholding on U.S. Income of "withholding tax under IRC 1441–1464"  
    Penalties under IRC sections 6721 and 6722 "penalties prescribed by IRC 6721 and IRC 6722" - the word "tax" printed to the right of the entry field should be lined through.  

  2. Certain tax forms show more than one kind of tax. If income taxes and separate and distinct other types of taxes are involved such as excise or employment taxes, "the kind of tax" portion of the consent form should indicate each type of tax. For example, in the examination of a Form 1040, there may be income tax issues and one or more other issues present that involve an Individual Retirement Account (IRA). The IRA issues may give rise to Chapter 43 taxes reportable on Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts, and Form 1040. If the "kind of tax" line of the consent is completed only for "income tax" the statutory period for assessing any Chapter 43 excise tax deficiency may expire, thus barring the assessment of the excise tax. Therefore, in this example, the "kind of tax" on the consent form should specify "income and excise" .

    Note:

    The additional tax imposed by IRC 72 on early distributions from a qualified retirement plans, including an IRA, or modified endowment contract is not a separate and distinct type of tax. Therefore, the additional tax imposed by IRC 72 is covered by a consent which specifies the "kind of tax" as "income." The same principle would also apply to the additional tax imposed by IRC 530 on taxable distributions from Coverdell education savings accounts and qualified tuition programs. See IRM 25.6.1.9.4.3, Forms Reporting More Than One Item of Tax, for a discussion of separate and distinct types of tax reported on the same form.

25.6.22.5.4  (08-26-2011)
Taxpayer's Address

  1. The concept of last known address is irrelevant to the execution of consents to extend the period of limitations on assessment. Therefore, the taxpayer's current address should be used, rather than the address shown on the return. The current address should be determined based on the best information available, including IDRS, correspondence from the taxpayer, etc. Therefore, in the case of a joint return when the spouses are not occupying the same address, the consent name line should be prepared in accord with IRM 25.6.22.5.2, Taxpayer's Name, and IRM 25.6.22.6.1.1, Joint Returns ; however the address line on the consent for the husband should reflect the current address of the husband and the address line of the consent for the wife should reflect the current address of the wife. As per IRM 25.6.22.3.1 (3), Separate Notification of Each Spouse, the separate consents are to be mailed to the separate addresses or personally presented to each spouse.

  2. The use of the address shown on the return will not render the consent invalid.

25.6.22.5.5  (08-26-2011)
Tax Period

  1. The year(s) covered by the consent should be stated in full, including the month, day, and year. Consents merely showing the year as "1995" , "9512" , or "fiscal year ending March 1995" are not acceptable rather the tax period should be expressed as in the examples below.

    Example:


    "December 31, 1995"
    "March 31, 1995"

  2. The definition of a taxable year under IRC 441(b) includes a period of less than 12 months. Thus, a return may be required for a period of less than 12 months. A consent covering the first or last return should show the dates of the beginning and end of the fractional part of the year. The word "ended" on the consent form is to be crossed out or deleted in a consent for fractional parts of a year.

    Examples:
    In the case of an individual on a calendar year basis, who died on September 1, 1996, the consent covering the income tax return (e.g. Form 1040) is to reflect:
    "for the period(s) January 1 to September 1, 1996"
    The consent covering the income tax return of the estate (i.e., Form 1041), in this example, should specify, if a calendar year is elected:
    "for the period(s) September 2 to December 31, 1996"

  3. Paragraph (2), immediately above, would also apply if the taxpayer changed the accounting period.

  4. If a fiscal year trust exempt from taxation under IRC 501(a) loses its exempt status, its first taxable year would end on December 31. See IRC 644.

25.6.22.5.5.1  (08-26-2011)
Multiple Tax Periods

  1. More than one tax period can be shown on the consent as long as there is adequate space on the form for doing so. The month, day, and year should be shown for each tax period.

    Examples:
    "December 31, 2005 and December 31, 2006" or
    "December 31, 2004, December 31, 2005, and December 31, 2006"

  2. One consent form will only be used for multiple years when the following are the same for all tax periods covered:

    • Taxpayer's name on each return

    • Kind of tax

    • Restricted issues

    • Date to which period for assessment is being extended

  3. The original consent, executed by both the taxpayer and the delegated Service official, will be securely attached to the back of page 1 of the return for the latest year covered by the consent. A copy of the consent will be securely attached to the back of page 1 of all other returns covered by the consent.

25.6.22.5.6  (08-26-2011)
Expiration Date

  1. The statute can be extended to a specific date (fixed-date consent), or the statute can be extended for an indefinite period, (open-ended consent).

  2. The open-ended consent terminates after the occurrence of certain events plus 90 days. Thus, a specific extension date is not stated on the open-ended consent. The open-ended consents include Form 872–A for income and various other tax returns, Form 872–O for TEFRA partnership returns, and Form 872–R (obsolete 4/11/2008) for TEFRA S corporation returns. See IRM 25.6.22.7, Open-ended Consents, for further discussion of open-ended consents as well as IRM 25.6.22.4.1, Assessment Consent Forms, above for other open-ended consent forms.

  3. The fixed-date consent terminates on a fixed date.

  4. The extension date on the fixed-date consent should be entered as the month, day and year, for example, December 31, 2008. The date to which the period for assessment is being extended should be the last day of the month.

    Example:

    "June 30, 2008"

25.6.22.5.7  (08-26-2011)
Consent Signature and Date

  1. Neither IRC 6501(c)(4) nor the regulations specify how consents are to be signed. Rev. Rul. 83-41, 1983-1 C.B. 349, clarified and amplified by Rev. Rul. 84-165, 1984-2 C.B. 305, provides that the consent should be signed in the same manner as the return that was filed, unless since filing, there has been a name change. In these cases, the consent should be prepared using both names on the name line, but the signature line should only show the current name.

    Example:
    Name line — "Mary Doe, formerly Mary Brown"
    Signature line — "Mary Doe"

  2. The individual(s) who signs the consent should enter the date signed in the space provided to the right of his/her signature.

25.6.22.5.7.1  (08-26-2011)
Executed by Authorized Representative

  1. An individual having a valid power of attorney from a taxpayer, which allows that individual (the authorized representative) to extend the statute of limitations, may execute a consent. The power of attorney must be valid at the time the consent is executed by the authorized representative.

  2. If a consent is signed under a power–of–attorney authorization, the approving official should make certain the power−of−attorney document:

    1. Is properly prepared, specifically indicating type of tax and years covered and not merely "all years" or "all taxes."

    2. Is specific in authorizing the representative to sign consents for the taxpayer.

    3. Is held by an individual authorized to represent the taxpayer before the Service.

      Caution:

      Accepting a consent supported by a Form 2848, Power of Attorney and Declaration of Representative, or other power−of−attorney document, in which the power of attorney does not have the authority to sign the consent, can result in the monitoring of an incorrect statute date and, potentially, an expired statute/barred deficiency situation. In addition, a representative appointed by a taxpayer with proper grant of authority to sign a consent ceases to have authority to sign the consent upon the death of the taxpayer.

  3. Rev. Proc. 81–38, 1981-2 C.B. 592, specifically provides that an unenrolled return preparer generally cannot sign any document (including a consent) for a taxpayer even though permitted to practice in a limited manner before the Examination function of the Service with respect to the returns he/she prepared.

  4. Power–of–attorney documents must be dated before or dated simultaneous with the signing of the consent by a representative.

  5. In the case of a joint return, the authorized representative's signature on the consent is only valid for the taxpayers who actually grant and sign the power–of–attorney document. If only the husband signs the power–of–attorney document, the representative's signature on the consent only pertains to the husband. The wife will also have to sign the consent in order for her to be covered by the terms of the consent.

  6. For the purposes of extending TEFRA entity statutes, it is preferred that the consent be executed by the Tax Matters Partner. See IRM 4.31.2.6.2, Extension of Statute at the Partnership Level. If someone other than the Tax Matters Partner is delegated the authority to sign a consent, the examiner should contact their local TEFRA coordinator as coordination with Counsel may be necessary. The authorized representative should not sign the consent unless the requirements set forth in are met. Treas. Reg. 301.6229(b)-1 is applicable to partnership taxable years beginning on or after October 4, 2001. For years beginning prior to October 4, 2001, see Treas. Reg. 301.6229(b)-1T. See IRM 25.6.22.6.5.1, Partnerships (TEFRA), below, as well as IRM 4.31.2.2.5, Power of Attorney (POA) Appointed by the Tax Matters Partner and IRM 4.31.2.6.4, Persons Empowered to Sign A Consent.

  7. The power–of–attorney document must comply with Treas. Reg. 301.6223(c)-1(e) when the authorized representative signs a consent for a direct or indirect partner in a TEFRA partnership in order for the consent (with appropriate TEFRA-related wording) to be effective in covering TEFRA partnership items and affected items. A power–of–attorney granted by a partner may not be given effect for purposes of TEFRA partnership items and affected items unless the partner specifically requests that the power be given such effect either in a statement furnished to the Internal Revenue Service in accordance with Treas. Reg. 301.6223(c)–1(b), or in the power–of–attorney document (Form 2848) itself. The power–of–attorney document should include the following statement: "The acts authorized by this power of attorney include representation for the purposes of Subchapter C of Chapter 63 of the Internal Revenue Code." See IRM 4.31.2.2.7.1, Powers of Attorney (POA) for Partners in TEFRA Partnerships, for further discussion.

    Note:

    Extending the TEFRA statute at the individual partner's level is not the usual approach and should only be used when circumstances dictate, e.g., the Tax Matters Partner is not readily determinable.

25.6.22.5.8  (08-26-2011)
Taxpayer's SSN or EIN

  1. The taxpayer's SSN or EIN should be shown in the space provided in the upper right hand corner of the consent.

25.6.22.5.9  (08-26-2011)
Service Person Requesting Consent

  1. Identification of the Service person requesting the consent should be typed in the space provided in the upper right hand corner of the consent form.

25.6.22.5.10  (08-26-2011)
Delegation of Authority to Sign for Commissioner and Date

  1. Consents may be signed on behalf of the Service by any person authorized to sign consents as specified in Servicewide Delegation Order 25–2 effective July 6, 2009 (formerly Delegation Order 42, Revision 28), Authority to Execute Agreements to Extend the Period of Limitations on Assessment or Collection and to Accept Form 900, Tax Collection Waiver, or Servicewide Delegation Order 4–19 (formerly Delegation Order 209, Revision 5) for TEFRA partnership or TEFRA Subchapter S corporation matters. See IRM 1.2.52.3, Delegations of Authority for Special Topic Activities, and IRM 1.2.43.20, Delegation of Authorities for the Examining Process, for the above-referenced delegation orders, respectively.

  2. The Service officials to whom the Commissioner has delegated authority are specified in the applicable delegation order. An employee seeking to have a consent executed must look to the published Servicewide delegation orders to determine who may execute a consent.

  3. The delegated IRS official will sign his/her own name and indicate his/her title and the date on the designated line of the form. The Division Executive's name and title are not required on the consent in order to make the consent valid as long as a delegated IRS official signs the consent. The various consent forms will be revised over the course of time to remove the line items for the name and title of the Division Executive from the consent form. Until the consent forms are revised to remove the line items for the name and title of the Division Executive, it is recommended (but not required) that the information regarding the executive's name and title be completed in order to avoid arguments as to the proper completion of the form. Due to the movement of personnel within the IRS, it is acceptable to let the name of the Division Executive blank until the consent is signed by the delegated IRS official at which time the name line of the Division Executive may be completed.

    Note:

    The name and title for the Division Executive depends upon an employee’s business operating division or function:
    • Small Business / Self-Employed: Area Director for your area; Director, Technical Services, Director, Specialty Programs; Director, Campus Compliance Services; Director, Fraud/BSA
    • Wage and Investment: Area Director; or Director, Field Compliance Services.
    • Large and Mid-Size Business: Director, Field Operations (for your industry)
    • Tax Exempt and Government Entities: Director, Exempt Organizations; Director, Employee Plans; Director, Federal, State and Local Governments; Director, Indian Tribal Governments; or Director, Tax Exempt Bonds.
    • Appeals: Chief, Appeals.

  4. Persons officially acting for someone authorized to sign consents may sign consents. But caution should be exercised to document the authority for the acting assignment in the event the person's authority to sign the consent is later questioned. It is recommended that the document giving authority to act be attached to the Service's copy of the consent.

  5. The Service official executing the consent should enter the date in the space provided to the right of his/her signature.

25.6.22.5.11  (08-26-2011)
Examiner's Responsibility after Receipt of Consent

  1. It is the examiner's responsibility to review the consent to ensure that it is correct and to ensure that all procedures have been followed, including but not limited to:

    1. That the consent agreement and all copies have been date stamped by the receiving office.

    2. That each consent agreement was properly executed by the taxpayer or signed by an authorized representative with authority to do so, and the taxpayer has not made any alterations on the consent or imposed any restrictions.

      Note:

      The consent Form 872 (Rev. 10-2009) and Form 872–A (Rev. 10-2009) include the following wording in paragraph (5) regarding conditions or restrictions : "This Form contains the entire terms of the consent to extend the Time to Assess Tax. There are no representations, promises, or agreements between the parties except those found or referenced on this Form." Therefore, any restriction must be included on these consent forms or clearly referenced on the forms to be binding.

      Caution:

      If the taxpayer signs the consent but communicates, either orally or in writing, that his/her signature is predicated on some term or condition not included or referenced on the consent form, consult Area Counsel as to how to proceed. See IRM 25.6.22.8.6, Area Counsel Approval, for the requirement to obtain Area Counsel’s approval prior to accepting (or soliciting) a restricted or conditional consent.

      Note:

      Pub 1035, Extending the Tax Assessment Period, attempts to address and avoid instances when the taxpayer alters the consent without discussion with the examiner by advising taxpayers as follows: "If you wish to add or amend restrictions for a consent form submitted for your signature, please contact the Service examiner or Appeals Officer by telephone or fax and the Service generally will prepare a new consent form."

    3. That the delegated Service official has signed both the original and duplicate original of the consent. If the taxpayer only returned one original consent, it should be photocopied, and the original and photocopy must be signed with an original signature of the delegated Service official. The consent form with the taxpayer's original signature should be retained in the case file.

    4. Attach the original, executed consent to the back of page 1 of the tax return to which it pertains. If the consent covers multiple years, the original consent is attached to the back of page 1 of the most recent year's return to which the consent applies. Photocopies are then attached to the back of page 1 of the other tax returns that are covered by the consent.

      Caution:

      Care should be exercised if the original return is not in the case file and a photocopy of the return is being used to conduct the examination. If the consent is attached to the back of the first page of the photocopy, the consent could be lost if the photocopy is destroyed when the copy of the return is replaced in the case file by an original return.
      If a consent was signed timely, but has been destroyed or lost, there is a possibility to establish that the execution of the agreement to extend the time to assess tax was timely. Contact Area Counsel regarding the sufficiency of evidence required to establish timely execution.

    5. Send the duplicate original with original signatures to the taxpayer along with Letter 929. If the taxpayer only returned one original consent, send a photocopy with the delegated Service official's original signature to the taxpayer and document the case activity record that this action has been accomplished. If the taxpayer has an authorized representative, use Letter 937 to transmit a copy of the executed consent to the authorized representative and document the case activity record that this action has been accomplished.

    6. A copy of the transmittal Letter 929 or other transmittal letter, as well as Letter 937, if applicable, should be retained in the case file.

    7. Prepare Form 5348, AIMS/ERCS Update (Examination Update), for manager’s approval to update AIMS /ERCS for the extended assessment statute date.

      Note:

      Under no circumstances should a consent which has been signed by a taxpayer be unilaterally altered by a Service employee.

25.6.22.5.12  (08-26-2011)
Manager's Responsibilities When Signing Consents

  1. The manager who is signing the consent on behalf of the Service must ensure the following by reviewing the case file and the consent. Managers should not sign consents without reviewing the case file along with the consent.

    1. That the consent was prepared using the most current official version of the relevant consent form. Consent forms have been updated to contain the notice of rights required by IRC 6501(c)(4)(B) and these consent forms containing the notice of rights must be used.

    2. That the information that has been entered on the consent is complete, accurate and consistent with the provisions of IRM 25.6.22.

    3. That the consent was properly executed by the taxpayer (including both spouses in joint return situations) or the taxpayer's authorized representative. Facsimile signatures of the taxpayer or authorized representative should not be accepted as being valid. One spouse must not sign for another unless so authorized. Do not accept a signature if the word "by" is used to indicate one spouse has executed the consent for the other (without proper authorization). Signatures on the consent should be reviewed for obvious discrepancies with those on the return, prior consents or the power–of–attorney document; however, the manager is not expected to perform a handwriting analysis.

    4. If the consent is signed by the authorized representative, that the power–of–attorney document permits the representative to sign the consent and the representative is not restricted in this regard. For example, unenrolled return preparers cannot sign consents even though they possess a Form 2848, Power of Attorney and Declaration of Representative, and may be serving as the representative before the Examination function. See Rev. Proc. 81–38, 1981-2 C.B. 592. Also, see IRM 25.6.22.5.7.1, Executed by Authorized Representative, for additional details as to the requirements the power-of-attorney document must meet when the consent is signed by the authorized representative.

    5. In the case of a joint return, that each spouse has been separately notified of the rights specified in IRC 6501(c)(4)(B) consistent with current procedures for notifying taxpayers of their rights. See IRM 25.6.22.3, Notification of Taxpayer's Rights, for procedures. Also, that the case activity record has been properly documented to indicate that the proper notice to each spouse and authorized representative, if any, has been accomplished.

    6. For consents intended to cover TEFRA partnership items and affected items, that all preceding consents, if any, for the tax period covered TEFRA partnership items and affected items. If a partner's statue was previously extended using a Form 872-I or Form 872-IA, or a pre-October 2009 revision of the Form 872 or Form 872–A containing the additional TEFRA-related wording or the TEFRA entity(s) statute under IRC 6229 are otherwise still open, the October 2009 revisions of Form 872 or Form 872-A can be used without modification for securing the subsequent consent. If the TEFRA statute is not open for the TEFRA partnerships, then the new TEFRA language included on the revised October 2009 Form 872 and Form 872-A is irrelevant. As such, the TEFRA-related wording should not be removed unless it is requested that it to be removed by the taxpayer. Careful consideration should be given as to whether the taxpayer has any unknown partnership investments before removing the TEFRA-related wording.

    7. That the consent is signed by both the taxpayer and the manager before the period for assessment expires, see Treas. Reg. 301.6501(c)-1(d).

    8. That the information submitted to update ERCS/AIMS is consistent with the consent and once the update to ERCS/AIMS has been entered, that the updated information is consistent with the terms of the consent.

25.6.22.6  (08-26-2011)
Preparation of Consents for Specific Entities and Taxes

  1. This section covers the procedures for the preparation of consents that pertain to specific return situations and taxes. These procedures are to be followed in conjunction with the general requirements covered in IRM 25.6.22.5, Preparation of Consent Forms – General Procedures.

25.6.22.6.1  (08-26-2011)
Individual Returns

  1. Use the name on the face of the return or the signature on the return, whichever is most complete.

  2. The consent should be prepared and signed using the same name as that under which the return was filed, unless since filing, there has been a name change. In these cases, the consent should be prepared using both names, but the signature line should only show the current name.

    Example:
    Name line — "Mary Doe, formerly Mary Brown"
    Signature line — "Mary Doe"

  3. Titles such as "Mr." , "Mrs." , "Dr." , etc. should be omitted in preparing and signing the consent. However, suffixes distinguishing closely related persons such as "Jr." , "Sr." , etc., appearing on a return or in the signature should be shown in the name and signature on the consent. Suffixes denoting degrees conferred as "M.D." , "LL.B." , etc. should be omitted in preparing a consent. However, if a taxpayer should use a suffix in signing a consent, it is acceptable.

25.6.22.6.1.1  (08-26-2011)
Joint Returns

  1. For a joint return, the complete name of both the husband and wife must be shown separately.

    Example:
    "John and Mary Doe" should be shown as "John Doe and Mary Doe"

  2. Each spouse has his/her own separate statute of limitations. Thus, each spouse must sign the consent. The signature of one spouse does not extend the statute for the other spouse. There is an exception when one spouse is acting as an attorney-in-fact or agent authorized by an acceptable power of attorney, under that circumstance one spouse may separately sign for the other spouse.

    Note:

    If only one spouse signs the consent that was prepared for both spouses' signatures, it is valid for that spouse. The other spouse is not bound by the consent.

  3. The return should be considered a joint return and a consent should be prepared and signed by both the husband and wife (if neither filed a separate return) in the following situations:

    1. If a return was filed in the names of both the husband and wife and was signed by either or both.

    2. If a return was filed in the name of one spouse, but was signed by both.

    3. If a return was filed by one spouse with a statement as to filing status, but includes income and deductions of both spouses.

    4. If a return was filed in the name of one spouse, but statements in the return indicate a joint filing election.

  4. Separate consents for each spouse must be prepared for each spouse for a joint return in the following situations:

    1. Taxpayers are divorced or separated.

    2. A spouse does not want the other spouse to know his/her whereabouts.

  5. In situations described in (4), immediately above, the consents will be prepared as follows:

    1. The separate consents will show both names on the face of the consent in the taxpayers' name line, but the address and signature line will be that of the respective individual spouse who is signing the particular consent form in question.

    2. If the spouses are divorced after filing a joint return and one spouse has had a name change, the consent should include both the current and former name, such as: "John Doe and Mary Brown, formerly Mary Doe" .

  6. Separate consents are to be prepared and each spouse must sign his or her own consent when separate returns are filed.

  7. Care should be exercised to see that consents are not signed by one party, either the husband or wife, for both spouses. If there is a similarity of handwriting or other indications that one spouse may have signed for both, a comparison should be made with the signatures on the return filed for that year. One spouse cannot sign for both unless he/she has a valid power of attorney.

  8. If either or both spouse(s) will not consent to an extension of the statute, the government’s interest must be protected by obtaining an agreement and assessing the tax or a statutory notice of deficiency must be issued against any non-consenting spouse(s), before the expiration of the normal assessment statute.

25.6.22.6.1.2  (08-26-2011)
Minor

  1. Rev. Rul. 82-206, 1982-2 C.B. 356, holds that a minor child is responsible for making his or her own tax return. If, however, the minor is unable to make a return due to age or other reasons, the parent or guardian must make and sign the return for the child. While the Service generally looks to who signed the tax return when determining who can sign the consent, this rule should not be applied in the case of a return signed by a minor; the consent should be executed by the parent, as natural guardian having custody of a child, or any legal guardian of the person appointed under state law if the taxpayer is a minor at the time the consent is signed. A consent executed by a minor might not be held to be valid if the consent's validity is disputed.

  2. If there is a guardian of the property of the minor under state law, that guardian should sign the consent.

  3. A consent, in the case of returns filed by or for a minor, should show the name of the minor on its face. The signature section should be completed and signed in the name of the minor, with his/her status (minor), and the parent's or guardian's name and title.

    Example:


    "Jill Doe, Minor
    By Joe Doe, Parent or (Guardian)"

  4. In situations involving guardians, Form 56, Notice Concerning Fiduciary Relationship, and a copy of the court document evidencing appointment of the guardian must be attached to the consent.

  5. After the minor has attained the age of majority under state law, he/she is the proper party to sign the consent. A consent signed by the parent or guardian of a minor after the minor has reached the age of majority is invalid.

    Caution:

    Over the course of the examination a minor may reach the age of majority and is then to sign consents on his/her own behalf. Therefore, the minor's age should be determined and monitored so that the initial consent and any subsequent consents are signed by the proper party.

  6. If a return was executed and filed for a minor by a party other than the guardian, the person signing the return may not sign the consent. In such situations the guardian needs to execute the consent for the minor in order for the consent to be valid. The guardian may authorize a representative to execute a consent.

  7. If there is an instance where a minor does not have a guardian or the status of the guardianship is not clear, a statutory notice of deficiency should be issued or the tax assessed before the statute expires, as dictated by the type of tax involved.

25.6.22.6.1.3  (08-26-2011)
Incompetent Persons

  1. A consent covering a return filed for an incompetent person will show on its face the name of the taxpayer. The signature on the consent will be prepared and signed in the name of the taxpayer, with his/her status, and the guardian's name and title.

    Example:


    " John Doe, Incompetent
    By Jane Doe, Conservator"

  2. Form 56, Notice Concerning Fiduciary Relationship, and a copy of the court document evidencing appointment of the guardian must accompany the consent.

25.6.22.6.1.4  (08-26-2011)
Decedents

  1. A decedent and his/her estate are separate and distinct taxable entities. A separate consent is necessary for the return reflecting the decedent's income tax liability up to the date of death (Form 1040). A separate consent is needed for the fiduciary return for the income earned by the estate after the death (Form 1041).

  2. For return(s) filed by the decedent prior to death and for the return(s) filed after the decedent’s death, a consent for a Form 1040 should be signed by the executor, administrator, or personal representative of the decedent’s estate, in accordance with the following examples:

    1. Separate or unmarried return filed:
      Name: "Estate of John Doe (deceased)"
      Signature: "Estate of John Doe (deceased)
      By Richard Roe, Executor, Administrator, or
      Personal Representative" (as appropriate)

    2. Joint return filed:
      Name: "Estate of John Doe (deceased) and Mary Doe"
      Signature: "Estate of John Doe (deceased)
      By Richard Roe, Executor, Administrator, or
      Personal Representative" (as appropriate)
      "Mary Doe"

      Note:

      Although a surviving spouse may file a joint return with a decedent if the decedent died within the taxable year and the surviving spouse did not remarry during the year, the executor or administrator for the decedent's estate generally must make and sign the return for the decedent. If no executor or administrator was appointed before the last day prescribed for filing, the surviving spouse may make and file a joint return; however, the executor or administrator may disaffirm the return within one year after the last day prescribed for filing. Even though a return filed by a surviving spouse is not disaffirmed, the consent must still be obtained from the executor or administrator.

  3. In situations where no administrator is appointed in a community property state, Area Counsel should be consulted for the name and signature to be used when there is a community survivor.

  4. A consent covering a return of a deceased person must be accompanied by a current Form 56, Notice Concerning Fiduciary Relationship, and a certified copy of letters of testamentary or court certificate certifying the present status of the estate. A copy of the decedent's will and codicils can also be used to evidence the appointment of the party as the personal representative, if the estate of the decedent has not been submitted to the court for administration.

    1. Letters of testamentary or court certificates are considered current only if less than 60 days have elapsed since their certification. If, for any reason, there is doubt as to their continued validity, irrespective of how much time has elapsed from the issuance of the letters, a new copy should be obtained containing a certification of the clerk of the court that the instrument has not been revoked and that it is still in full force and effect.

    2. The Form 56 and the letters of testamentary or court certificates, or other evidence of the appointment of the personal representative such as a copy of the will and codicils if the estate has not been submitted to the court for administration, must be attached to the return with the original consent.

  5. If more than one executor or administrator are named, any one of them can sign a return. Consequently, a consent signed by any one of them is valid, even if that individual did not sign the return that is the subject of the consent. Further, more than one executor may sign the consent. See Treas. Reg. 1.6012-3(a)-(c) and Rev. Rul. 84-165, 1984-2 C.B. 305, clarifying Rev. Rul. 83-41, 1983-1 C.B. 349. If, however, the instrument appointing the executors or administrators vests the authority to bind the estate in a specific individual, only that individual may sign the consent.

  6. In the event an executor or administrator is not appointed, no one may sign a consent for the decedent, except in the case of a community survivor. However, heirs liable as transferees under IRC 6901, may sign a consent for their own liabilities.

  7. The statute cannot be extended after the fiduciary has been discharged. However, heirs may be liable as transferees. See the procedures for transferee liability at IRM 25.6.22.6.17.1, Transferee Liability.

    Caution:

    Do not accept a consent to extend the period of time for assessment of the decedent's tax liability or the liability of a transferee of the decedent's estate that has been signed by a fiduciary who has already been discharged by the court having jurisdiction.

  8. In paragraphs (6) and (7) immediately above, if a joint return was filed, the surviving spouse's statute can be extended by him/her.

25.6.22.6.2  (08-26-2011)
Corporations

  1. Generally, the name of the taxpayer shown on the return can be used on the consent, unless it is known that the name is not correct. Consents executed on behalf of corporations must be prepared in the correct name as disclosed by the corporate charter. If there is doubt as to the proper name of the corporation, Area Counsel should be consulted.

  2. When a corporation changes its name only, continuing to operate under the old charter, the consent should be prepared in both names and the signature should reflect both names.

    Example:


    "Black Company, formerly Tan Company"



    Documentary evidence of the legal name change should be attached to the original consent. A copy of the relevant corporate minutes will suffice.

  3. If the word "The" is part of the legal name of the corporation, it must be entered on the consent. The words such as "Co." , "Company" , "Inc." , and "Incorporated" must be shown as used in the legal name of the corporation. All punctuation must be properly reflected.

  4. The consent should be signed with the corporate name, followed by the signature and title of such officers of the corporation, as are empowered under the laws of the state in which the corporation is located, to sign for the corporation. Therefore, you must look to state law to determine who is empowered to sign. Generally, the president and the secretary of the corporation are empowered to sign the consent. Assistant officers and controllers are not empowered to sign consents unless they are authorized by the corporation's Board of Directors. Contact Area Counsel if there is any question as to the proper person to sign the consent.

    1. Rev. Rul. 83–41, 1983-1 C.B. 349, states that a consent may be signed by the president, vice-president, treasurer, assistant treasurer, chief accounting officer, or any other officer duly authorized to act in this capacity, whether or not they signed the return.

    2. It is important that the title of the signing officer be shown in the consent.

  5. It is not necessary that the corporate seal be affixed to the consent.

25.6.22.6.2.1  (08-26-2011)
Consolidated Returns

  1. For consolidated income tax returns, one consent will suffice to cover all companies included in the consolidated income tax return.

  2. A single consent for more than one year may be obtained even though the composition of the group may have changed considerably during the period covered by the consent. This is so even if the parent of the group has changed; however, the years included on a single consent must be years during which the group is considered to have remained in existence. A single consent should not be used for both separate and consolidated return years.

  3. Generally, the consent should be prepared in the name of the parent corporation as shown on the consolidated return. In all cases, however, the name in the caption of the consent should reference both the common parent corporation and the affiliated companies. For example, where the common parent of the group is ABC Corporation, a proper caption would read: ABC Corporation and Subsidiaries

  4. The consent must be signed in the name of the common parent corporation. The name of the common parent should be typed on the "Corporate Name" line, followed by the signature and title of an officer who is empowered under state laws to sign for the common parent corporation.

  5. Examples of the proper method for identifying consolidated taxpayer in caption of Form 872 for taxable years beginning before June 28, 2002 follow:

    Note:

    These examples apply for taxable years for which the due date (without extensions) of the consolidated return is after September 7, 1988 (the effective date of former Treas. Reg. 1.1502-77T, which is currently found at Treas. Reg. 1.1502-77A(g)).

    Note:

    Treas. Reg. 1.1502-77 [TD 9002, 6/27/02] governs taxable years beginning on or after 6/28/02. See IRM 25.6.22.6.2.1 (6) below for Examples of the Proper Method for Identifying Consolidated Taxpayer in Caption of Form 872 for taxable years beginning on or after June 28, 2002.

    Note:

    The examples immediately below and at IRM 25.6.22.6.2.1 (6) refer to Form 872 but any suitable consent form can be used as well, e.g., Form 872–A.

    1. Common Parent of the Group
      The common parent for the year to be extended will execute the consent.
      The consent caption should read: Corporation P (EIN XX-XXXXXXX) and Subsidiaries consolidated group

    2. Alternative Agent
      An alternative agent for the year to be extended will execute the consent. Example - Corporation A is alternative agent for the Corporation P and Subsidiaries consolidated group for taxable year 19XX.
      The consent caption should read: Corporation A (EIN: XX-XXXXXXX), as agent for the members of the Corporation P and Subsidiaries consolidated group*
      Place an asterisk after "group" . At the bottom of the Form 872, indicate: *This is with respect to the consolidated tax of the Corporation P and Subsidiaries consolidated group.

    3. Successor Corporation, Which Is Also an Alternative Agent
      Example - Corporation A, a successor corporation to Corporation P (the common parent of the consolidated group for the years at issue), who also qualifies as an alternative agent under Treas. Reg. 1.1502–77A(e) will execute the consent.
      The consent caption should read: Corporation A (EIN: XX-XXXXXXX), as successor to Corporation P (EIN: XX-XXXXXXX), and as agent for the members of the Corporation P and Subsidiaries consolidated group*.
      Place an asterisk after "group" . At the bottom of the Form 872, indicate: *This is with respect to the consolidated tax of the Corporation P and Subsidiaries consolidated group.

      Note:

      Corporation A is liable as a successor of Corporation P, the common parent of the consolidated group under audit.

      Note:

      Corporation A is liable as a successor only of Corporation P. Thus, it is incorrect to state, "Corporation A, as successor to Corporation P and Subsidiaries consolidated group." However, it is correct to state, "Corporation A, as successor to Corporation P." Note also that generally, where Corporation A is a successor under state law, it may also be an alternative agent under Treas. Reg. 1.1502-77A(e)(4)(ii) for the former members of the Corporation P consolidated group with respect to the group's pre-merger years. (However, an alternative agent need not be the successor to the old common parent under state law. The concept of state law successor, which determines liability, is different than the concept of successor under the consolidated return regulations.)

    4. Service Deals with Subsidiary Member Separately
      Example - A subsidiary member of the group with whom the Service is dealing separately will execute the consent.

      Caution:

      The Service must send the common parent a "breaking agency" letter.


      The consent caption should read: Corporation S*
      Place an asterisk after the subsidiary's name. At the bottom of the Form 872, indicate: *This is with respect to its several liability for the consolidated tax of the Corporation P and Subsidiaries consolidated group.

    5. Common Parent, Which Changed Its Name Once
      Example - Corporation P, the common parent of the consolidated group for the years in issue, has changed its name one time and the Service seeks to have it execute the consent.
      The consent caption should read: Corporation Q (EIN: XX-XXXXXXX) (formerly Corporation P)

    6. Common Parent, Which Changed Its Name Twice
      Example - Corporation P, the common parent of the consolidated group for the years in issue, has changed its name twice since the tax year in issue. (Corporation P changed its name to Corporation Q and then changed its name again to Corporation R).
      The consent caption should read: Corporation R (EIN: XX-XXXXXXX) (formerly Corporation Q, formerly Corporation P) and Subsidiaries consolidated group

    7. Successor Corporation, Which Changed Its Name after Merging with the Common Parent
      Example - Corporation A merged with Corporation P, the common parent of the Corporation P consolidated group, and immediately thereafter, Corporation A changed its name to Corporation B. Since Corporation A (now B) is the successor of the common parent, it may also be an alternative agent to the members of the P consolidated group with respect to the group’s pre-merger years.
      The consent caption should read: Corporation B (EIN: XX-XXXXXXX) (formerly Corporation A) as successor to Corporation P (EIN: XX-XXXXXXX), and as agent for the members of the Corporation P and Subsidiaries consolidated group*
      Place an asterisk after "group" . At the bottom of the Form 872, indicate: *This is with respect to the consolidated tax of the Corporation P and Subsidiaries consolidated group.

    8. Successor Corporation, Which Merged with Common Parent, Which Had Previously Changed Its Name
      Example - Corporation A (the successor corporation) merged into Corporation Q (the common parent of the consolidated group) and Corporation Q had previously been known as Corporation P in the years at issue.
      The consent caption should read: Corporation A (EIN: XX-XXXXXXX), as successor to Corporation Q (EIN: XX-XXXXXXX) (formerly Corporation P), and as agent for the members of the Corporation P and Subsidiaries consolidated group*
      Place an asterisk after "group" . At the bottom of the Form 872, indicate: *This is with respect to the consolidated tax of the Corporation P and Subsidiaries consolidated group.

    9. Successor Corporation, Which Changed Its Name after Merger with Common Parent, Which Had Previously Changed Its Name
      Example - Corporation A merged with Corporation Q (the common parent of the consolidated group under audit) and Corporation A survived the merger. Immediately after the merger, Corporation A changed its name to Corporation B. For the years under audit, Corporation Q had been known as Corporation P.
      The consent caption should read: Corporation B (EIN: XX-XXXXXXX) (formerly Corporation A) as successor to Corporation Q (EIN: XX-XXXXXXX) (formerly Corporation P), and as agent for the members of the Corporation P and Subsidiaries consolidated group*
      Place an asterisk after "group" . At the bottom of the Form 872, indicate: *This is with respect to the consolidated tax of the Corporation P and Subsidiaries consolidated group.

    10. Reverse Acquisition by Merger or Downstream Transfer by Merger
      Example - Corporation A merged with Corporation P, the common parent of the Corporation P and Subsidiaries consolidated group, in a reverse acquisition transaction. Corporation A survived the merger. Because the transaction constituted a reverse acquisition under Treas. Reg. 1.1502-75(d)(3), the Corporation P and Subsidiaries consolidated group continues to exist (and therefore does not file a short year return), but with Corporation A as the new common parent.
      The consent caption should read: Corporation A (EIN: XX-XXXXXXX) as successor to Corporation P (EIN: XX-XXXXXXX), and as common parent agent of the Corporation P and Subsidiaries consolidated group*
      Place an asterisk after "group" . At the bottom of the Form 872, indicate: *This is with respect to the consolidated tax of the Corporation P and Subsidiaries consolidated group.

      Note:

      This example applies to extending taxable years that occurred prior to the year of the reverse acquisition. In the year of the reverse acquisition, the new common parent Corporation A would file the return in its own name and would therefore be the one that executes the Form 872.

    11. Successor of a Successor
      Example - Corporation A merged with Corporation X, which had previously merged with Corporation P (the common parent of the Corporation P and Subsidiaries consolidated group). The consolidated years under audit are the pre-merger years of Corporation P.
      The consent caption should read: Corporation A (EIN: XX-XXXXXXX), as successor to Corporation X (EIN XX-XXXXXXX), successor to Corporation P, and as agent for the members of the Corporation P and Subsidiaries consolidated group.*
      Place an asterisk after "group" . At the bottom of the Form 872, indicate: *This is with respect to the consolidated tax of the Corporation P and Subsidiaries consolidated group.

      Note:

      Corporation A is liable as a successor of a successor of Corporation P, the common parent of the consolidated group under audit. Even as a successor of a successor, Corporation A may be an alternative agent under Treas. Reg. 1.1502-77A(e)(4)(ii) for the former members of the Corporation P consolidated group.

  6. Examples of the proper method for identifying consolidated taxpayer in caption of Form 872 (or other suitable consent form) for taxable years beginning on or after June 28, 2002 follow:

    1. Common Parent of the Group
      The common parent for the year to be extended will execute the consent.
      Example – P is the common parent of the P and Subsidiaries Consolidated group during the group’s taxable Year 1. P will execute the consent for the members of the group for the group’s taxable Year 1.
      The consent caption should read: P Corporation (EIN XX-XXXXXX) and Subsidiaries consolidated group.

    2. Common Parent Designates Its Successor as Substitute Agent
      The successor, as substitute agent for the year to be extended, will execute the consent.
      Example – Common Parent P designates Y, its successor, as Substitute Agent. Y will execute the consent.
      The consent caption should read: Y (EIN: XX-XXXXXXX), as successor to P (EIN: XX-XXXXXXX), and as agent for the members of the P and Subsidiaries consolidated group*
      Place an asterisk after "group" . At the bottom of the Form 872, indicate: *This is with respect to the consolidated tax of the P and Subsidiaries consolidated group.

    3. Common Parent Designates a Member of the Group as Substitute Agent
      The member, as substitute agent for the year to be extended will execute the consent.
      Example - Common Parent P designates S, a member of the P and Subsidiaries Consolidated group for the year to be extended, as Substitute Agent. S will execute the consent.
      The consent caption should read: S (EIN: XX-XXXXXXX), as agent for the members of the P (EIN: XX-XXXXXXX) and Subsidiaries consolidated group*
      Place an asterisk after "group" . At the bottom of the Form 872, indicate: *This is with respect to the consolidated tax of the P and Subsidiaries consolidated group.

    4. Default Substitute Agent
      The successor the common parent, as default substitute agent for the year to be extended, will execute the consent.
      Example - Common Parent P fails to designate a Substitute Agent; by default, Y corporation, the successor to P, is the Default Substitute Agent. Y will execute the consent.
      The consent caption should read: Y (EIN: XX-XXXXXXX) as successor to P (EIN: XX-XXXXXXX) and as agent for the members of the P and Subsidiaries consolidated group*
      Place an asterisk after "group" . At the bottom of the Form 872, indicate: *This is with respect to the consolidated tax of the P and Subsidiaries consolidated group.

    5. Common Parent’s Successor, the Default Substitute Agent, Changed Its Name Once
      The common parent’s successor, as default substitute agent for the year to be extended, will execute the consent.
      Example - Common Parent P failed to designate a Substitute Agent; by default, Y corporation, the successor to P and the Default Substitute Agent, changed its name to X corporation. X will execute the consent.
      The consent caption should read: X (EIN: XX-XXXXXXX) (formerly Y) as successor to P (EIN: XX-XXXXXXX), and as agent for the members of the P and Subsidiaries Consolidated group.*
      Place an asterisk after "group" . At the bottom of the Form 872, indicate: *This is with respect to the consolidated tax of P and Subsidiaries consolidated group.

    6. Common Parent Changed Its Name, Merged out of Existence and Failed to Designate a Substitute Agent
      The common parent’s successor, as default substitute agent for the year to be extended, will execute the consent.
      Example - Common Parent P, which changed its name to Q corporation, failed to designate a Substitute Agent prior to merging out of existence; by default, Y corporation, the successor to P, is the Default Substitute Agent. Y will execute the consent.
      The consent caption should read: Y (EIN: XX-XXXXXX), as successor to Q (EIN: XX-XXXXXX) (formerly P), and as agent for members of P (EIN: XX-XXXXXX) and Subsidiaries consolidated group*
      Place an asterisk after "group" . At the bottom of the Form 872, indicate: *This is with respect to the consolidated tax of the P and Subsidiaries consolidated group.

    7. Common Parent Changed Its Name, Merged Out of Existence and Failed to Designate a Substitute Agent; Default Substitute Agent Changed Its Name
      The common parent’s successor, as default substitute agent for the year to be extended, will execute the consent.
      Example – Common Parent P changed its name to Q corporation, merged out of existence but failed to designate a Substitute Agent; Y corporation, the successor to P as well as the Default Substitute Agent, changed its name to X corporation. X will execute the consent.
      The consent caption should read: X (EIN: XX-XXXXXX) (formerly Y) as successor to Q (EIN: XX-XXXXXX) (formerly P), and as agent for members of the P (EIN: XX-XXXXXXX) and Subsidiaries consolidated group.*
      Place an asterisk after "group" . At the bottom of the Form 872, indicate: *This is with respect to the consolidated tax of the P and Subsidiaries consolidated group.

    8. Successor to Parent Merges into Another Corporation (the Successor’s Successor)
      Successor’s Existence Terminates in the Merger
      The successor to the successor (the successor by merger to common parent) for the year to be extended will execute the consent.
      Example - Y corporation, the successor by merger to the Common Parent P, merged into Z corporation. Y’s existence terminated. Z will execute the consents.
      The consent caption should read: Z (EIN: XX-XXXXXX), successor to Y (EIN: XX-XXXXXX), successor to P (EIN: XX-XXXXXX), and agent for members of P (EIN: XX-XXXXXX) and Subsidiaries consolidated group.*
      Place an asterisk after "group" . At the bottom of the Form 872, indicate: *This is with respect to the consolidated tax of the P and Subsidiaries consolidated group.

    9. IRS Designates a Member of The Group as Substitute Agent
      The member, as Designated Substitute Agent for the year to be extended, will execute the consent.
      Example – Common Parent P merges out of existence and fails to designate an agent. Commissioner designates S corporation, a member of the group for the year to be extended, to act as Substitute Agent. S will execute the consent.
      The consent caption should read: S (EIN: XX-XXXXXX), as agent for the members of the P (EIN: XX-XXXXXX) and Subsidiaries consolidated group.*
      Place an asterisk after "group" . At the bottom of the Form 872, indicate: *this is with respect to the consolidated tax of the P and Subsidiaries consolidated group.

    10. IRS Designates Successor of Member to Act as Substitute Agent
      The Service may designate a successor of a member as the Substitute Agent; if so, the successor will execute the consent.
      Example – Common Parent P fails to designate a Substitute Agent before merging out of existence. S, a member of the group, merges into T, an unrelated corporation. Commissioner designates T to act as Substitute Agent. T will execute the consent.
      The consent caption should read: T (EIN: XX-XXXXXX), successor to S (EIN: XX-XXXXXXX) (member of the P and Subsidiaries Consolidated group), and agent for the members of the P (EIN: XX-XXXXXX) and Subsidiaries Consolidated group.*
      Place an asterisk after "group" . At the bottom of the Form 872, indicate: *this is with respect to the consolidated tax of the P and Subsidiaries consolidated group.

    11. Common Parent Converts to an LLC and No Member Remains to Act as Substitute Agent
      The common parent, as sole remaining member, for the year to be extended will execute the consent.
      Example – Common Parent P and its two subsidiaries, S and S-1, are acquired by Z, a Subchapter S corporation. Simultaneously, Z makes a valid QSub election pursuant to IRC 1361(b)(3) for T, S and S-1. Because there are now no non-disregarded members of the P group, Common Parent P is the Agent for all successors and transferees of the former members of the P and Subsidiaries consolidated group, even though P is a QSub. P will execute the consent.
      The consent caption should read: P (EIN: XX-XXXXXX), as agent for members of P and Subsidiaries consolidated group*
      Place an asterisk after "group" . At the bottom of the Form 872, indicate: *This is with respect to the consolidated tax of the P and Subsidiaries consolidated group.

    12. Subsidiary of Consolidated Group as a Partner in a TEFRA Partnership (Forms Form 872–I and Form 872–IA prior to 10/29/2009 and Form 872 and Form 872–A after that date)
      The common parent for the year of the flow through and the subsidiary partner both should execute the partner-level consent.
      Example – S-1 is a member of the P and Subsidiaries Consolidated group and a partner in the ABC Partnership (a TEFRA partnership). The Service seeks to extend the group’s consolidated taxable Year 1, which corresponds to the year of the ABC Partnership flow-through. P is the common parent of the P and Subsidiaries Consolidated group in Year 1.
      P will execute, and S-1 should also execute, the consent extending the P and Subsidiaries consolidated taxable Year 1 with regard to the ABC Partnership flow-through items, as well as other non-partnership items on the return.
      The consent caption should read: P (EIN: XX-XXXXXX) and Subsidiaries Consolidated group; S-1, partner in the ABC Partnership.*
      Place an asterisk after "group" . At the bottom of the appropriate consent form, indicate: *This is with respect to the consolidated tax of the P and Subsidiaries consolidated group.

25.6.22.6.2.2  (08-26-2011)
Subsidiary as Partner and as Member of a Consolidated Return

  1. Execution of Form 872-P for a TEFRA Partnership. A subsidiary acting as tax matters partner must sign Form 872-P to bind the partners of the TEFRA partnership. See Treas. Reg. 1.1502-77(a)(1) and Treas. Reg. 1.1502-77(a)(3)(v). (In general, the common parent is the sole agent (agent for the group) that is authorized to act in its own name with respect to all matters relating to the tax liability for that consolidated return year, but matters under IRC 6221 - 6234 and the accompanying regulations are reserved exclusively to the subsidiary acting as tax matters partner.)

  2. Member as Partner in a TEFRA Partnership Other Than One Acting as Tax Matters Partner. The Commissioner generally will deal directly with any member in its capacity as a partner of a partnership that is subject to the TEFRA provisions. IRC 6221 - 6234 and the accompanying regulations. The Commissioner will, however, obtain Form 872-I or Form 872-IA prior to 10/29/2009 and Form 872 or Form 872–A after that date from the common parent. (It is recommended that both the member and the common parent execute the appropriate consent form). If requested to do so, the Commissioner may deal with the common parent as agent for such member on any matter related to the partnership, except in regards to a settlement under IRC 6224(c) and except to the extent the member acts as tax matters partner of the partnership as indicated above. See Treas. Reg. 1.1502-77(a)(6)(iii). The above corporate regulations only apply for consolidated taxable years beginning on or after June 28, 2002. See Treas. Reg. 1.1502-77(h)(1)(i).

    Note:

    In order to reduce the potential for disputes, obtain consents from the common parent for consolidated taxable years beginning before June 28, 2002, and obtain consents from both the common parent and the member for consolidated taxable years beginning on or after that date.


  3. Members as Partners in a Non-TEFRA Partnership. The common parent must sign the consent as the agent that is authorized to act in its own name with respect to all matters relating to the tax liability for that consolidated return year.

25.6.22.6.2.3  (08-26-2011)
Parent and Subsidiary Corporations

  1. One consent may be used to extend the statute of the parent corporation and any or all its subsidiary corporations that filed separate returns provided that the procedures contained in this subsection are followed. No fixed percentage of ownership by the parent corporation is required. The subsidiaries included on the required rider (see immediately below) and covered by the consent may be less than wholly owned by the parent corporation.

  2. For one consent to cover the parent and subsidiaries, a rider (as required by Rev. Proc. 72–38, 1972-2 C.B. 813, clarified by Rev. Proc. 82–6, 1982-1 C.B. 409), which lists all the corporations covered by the consent and the following information, must be attached to the consent:

    1. The name of the parent corporation and the number of subsidiary corporations named on an attached rider shall be inserted in the space provided for the name of the taxpayer on the consent. The rider attached to the consent will contain a supplemental agreement and will clearly identify the parent corporation and the specific subsidiaries by showing the name, address, identification number, and the particular taxable year(s) of each subsidiary with respect to which the consent is applicable.

    2. Both the consent and the rider shall be executed on behalf of the parent corporation and all the subsidiaries named on the rider by a duly authorized officer of the parent corporation who (1) is also a duly authorized officer of each of the subsidiaries, or (2) has been specifically authorized to execute a consent by powers of attorney executed by each of the subsidiaries. The consent must specifically show that the person signing for the parent corporation and subsidiaries is signing in the capacity of an authorized officer of the parent corporation and as an authorized officer or attorney-in-fact for each and all of the listed subsidiaries.

    3. In the event two or more officers of the parent corporation are authorized to sign for the various subsidiaries, in accordance with (b) above, the rider attached to the consent should be arranged to show the names of the subsidiaries for which each officer or attorney-in-fact is signing.

  3. The original consent and rider will be attached to the tax return for the parent's most recent taxable year covered by the consent. Copies of the consent and rider will be attached to the tax returns of the parent for other years covered by the consent. Copies will also be attached to each of the subsidiaries' returns covered by the consent.

  4. For the format of the rider for Form 872 or Form 872–A (income tax), Form 872–B (excise tax), or Form SS–10 (employment tax), see the Exhibits in Rev. Proc. 72–38, 1972-2 C.B. 813.

25.6.22.6.2.4  (08-26-2011)
Dissolved Corporations

  1. Generally, consents should not be obtained from the dissolved corporation, unless Area Counsel approval has been obtained.

  2. In the cases of dissolved corporations, whether a valid consent can be obtained depends upon the law of the state of incorporation. The state law determines the period the corporation is considered in existence for purposes of winding up its business affairs. State law will not shorten the statute of limitations for the assessment of Federal taxes, but it can limit the period of time in which the officers of the dissolved corporation may act for the corporation. State law may prescribe a fixed period, reasonable period, or indefinite period of time.

  3. After the corporation's existence is terminated, there is usually no person with authority to act on its behalf to sign a consent for the corporation.

  4. The consent is to be signed by an individual(s) who was an officer(s) of the corporation at the date of dissolution, as authorized by the controlling state law, articles of incorporation, by-laws and corporate minutes. Consents extending the statute beyond the date of continued existence under state law will be invalid, except in the case of consolidated returns where other members of the groups remain in existence. (See Umpqua Plywood Corp. v. All, 13 AFTR2d 1724, (N.D. Ill. 1964).

  5. In situations where transferee liability exists, action will be taken to protect the statute of limitations of the transferee as well as the transferor.

    1. In addition to the consent for the dissolved corporation, Form 977, Consent to Extend the Time to Assess Liability at Law or in Equity for Income, Gift, and Estate Tax Against a Transferee or Fiduciary; Form 2045, Transferee Agreement (used in income tax situations); Form 4016, Consent Fixing Period of Limitation upon Assessment of Employment or Miscellaneous Excise Taxes Against a Transferee, will be secured. See IRM 25.6.22.6.17.1, Transferee Liability. Form 977, Form 2045, and/or Form 4016 should be secured in duplicate.

      Note:

      Form 2045 is an admission of status as a transferee and waives any requirement for issuance of a statutory notice of deficiency to the transferor and should be obtained as part of the process in income tax situations but it is not an extension of the ASED of the transferor or transferee.

    2. Should there be any doubt in a particular case as to whether it would be advisable to accept an agreement from the transferee as a basis for not proceeding against a dissolved corporation, the Group or Team Manager with jurisdiction over the return should request advice from Area Counsel. The request should be accompanied by a comprehensive statement of the facts and circumstances of the case.

25.6.22.6.2.5  (08-26-2011)
Merged Corporations

  1. As a matter of state law, the successor (acquiring) corporation in a merger or consolidation becomes primarily liable for the debts of the predecessor (acquired) corporation. Also, the merger or consolidation agreement may provide that the successor corporation will be liable for the tax indebtedness of the predecessor, in which case the successor is liable as a transferee. In such a case, it is important that the agreement of merger be examined to be sure that there are no limitations or exclusions on the successor’s liability.

  2. The consent should be prepared and executed as in the following examples:

    Example:
    Caption Name: "XYZ Corporation (XYZ's EIN), Successor in interest to ABC Corporation (ABC's EIN)"
    Signed by: "An officer of XYZ Corporation
    "
    or
    Caption Name: "XYZ Corporation (XYZ's EIN), Successor by merger to ABC Corporation (ABC's EIN)"
    Signed by: "An officer of XYZ Corporation"

  3. If there are any questions as to the proper names or format to be used, Area Counsel should be contacted.

  4. To minimize the risk of relying on an invalid consent, action will be taken to protect the statute of limitations of the transferee as well as the transferor. In addition to the consent for the dissolved corporation, Form 977, Consent to Extend the Time to Assess Liability at Law or in Equity for Income, Gift, and Estate Tax Against a Transferee or Fiduciary; Form 2045, Transferee Agreement (used in income tax situations); and/or Form 4016, Consent Fixing Period of Limitation upon Assessment of Employment or Miscellaneous Excise Taxes Against a Transferee, will be secured. See IRM 25.6.22.6.17.1, Transferee Liability. Form 977, Form 2045, and/or Form 4016 should be secured in duplicate.

    Note:

    Form 2045 is an admission of status as a transferee and waives any requirement for issuance of a statutory notice of deficiency to the transferor and should be obtained as part of the process in income tax situations but it is not an extension of the ASED of the transferor or transferee.

    1. Should there be any doubt in a particular case as to whether it would be advisable to accept an agreement from the transferee as a basis for not proceeding against a dissolved corporation (transferor), the Group or Team Manager with jurisdiction of the return should request advice from Area Counsel. The request should be accompanied by a comprehensive statement of the facts and circumstances of the case.

25.6.22.6.3  (08-26-2011)
Subchapter S Corporations (Non-TEFRA)

  1. There is no statute on an S corporation return for pass-thru items to the shareholders. The statute of limitation is determined at the shareholder level for each shareholder. Therefore, the statute for each shareholder is extended by following the consent procedures for the individual or entity shareholder returns.

  2. Where there is potential for tax on the S corporation itself, the statute must be protected at the S corporation level. Tax due at the S corporation level can occur in the following situations:

    1. Tax imposed on S corporation built-in gains — IRC 1374.

    2. Tax imposed on S corporation passive investment income — IRC 1375.

    3. If the corporation has filed as an S corporation and it is later determined that it does not qualify as an S corporation, it will be converted to a C corporation. The statute of the converted C corporation begins with the filing of the S corporation return. Therefore, if there is a potential that the S corporation will be converted to a C corporation, the statute must be protected.

  3. Penalties may also be assessed against the S corporation so the statute must be protected if penalties are applicable; for example, the penalty for late filing or failure to disclose a "listed" transaction.

  4. To extend the statute in situations described in paragraphs (2) or (3), above, follow the consent procedures for C corporations.

25.6.22.6.3.1  (08-26-2011)
Subchapter S Corporations (TEFRA)

  1. The TEFRA rules do not apply to any S corporation tax year beginning after 12/31/96. The Small Business Job Protection Act of 1996, Pub. L. No. 104–188, repealed the unified audit procedures for S corporations, IRC 6241–6245, effective for S corporation taxable years beginning after December 31, 1996.

25.6.22.6.3.2  (08-26-2011)
Converted Subchapter S Corporation Items

  1. If TEFRA Subchapter S items are converted to non-Subchapter S items under IRC 6231(b). IRC 6229(f) provides that the statute for assessment of tax on the shareholder's return for these items shall not expire before the date that is one year from the date of conversion. This one–year period can be extended by consent.

  2. Defaulted Final S-Corporation Administrative Adjustment (FSAA) and court decisions are not conversions under IRC 6231(b). In these cases, the one–year assessment period can be extended by using a modified consent which specifically references Subchapter S items. Consult Area Counsel for the proper procedure if you encounter this situation as the number of instances should be few considering the fact that TEFRA was repealed for S corporations effective with taxable years beginning after 12/31/96.

25.6.22.6.4  (08-26-2011)
Associations

  1. A consent covering a return filed by an association must be accompanied by a copy of the articles of agreement. The legal name of the association, as it appears in the articles of agreement, will be shown in the name caption of the consent.

  2. The name of the association and the names and titles of the signers should be entered above the authorized signatures.

  3. Use Form 872 or Form 872–A.

25.6.22.6.5  (08-26-2011)
Partnerships (Non-TEFRA)

  1. There is no statute for a partnership return except for the assessment of penalties, if the partnership is non-TEFRA. The statute of limitation is determined at the partner level for each partner. Therefore, the statute for each partner is extended by following the consent procedures for the individual or entity partner's return.

  2. Penalties may also be assessed against the partnership so the statute must be protected if penalties are applicable; for example, the penalty for late filing under IRC 6698. The consent form should indicate, "The amount of any IRC section [insert Internal Revenue Code section number] penalty [ cross out the preprinted word tax on the consent form and insert the word penalty] due with respect to any return(s) made by or for the above taxpayer(s) for the period ended...."

25.6.22.6.5.1  (08-26-2011)
Partnerships (TEFRA)

  1. The statute of limitations for assessing deficiencies attributable to TEFRA partnership items and affected items, such as pass–thru items to the partner, is generally determined at the partnership level. Therefore, the consent should be executed at the partnership level. TEFRA partnership items and affected items are defined in IRC 6231(a)(3) and (5) and Treas. Reg. 301.6231(a)(3)–1 and (a)(5)–1.

  2. The TEFRA procedures set forth in IRC 6229 must be followed. See TEFRA IRM 4.31.2.6, Statutes, for the procedures to be followed in obtaining consents for TEFRA partnerships.

  3. The consent should show the correct name of the partnership as it appears in the partnership agreement.

  4. The consent agreement may be signed by the Tax Matters Partner of the partnership or other authorized person who complies with the requirements set forth in Treas. Reg. 301.6229(b)-1. The properly executed consent under IRC 6229(b)(1)(B), holds the statute open for all the partners, as to the partnership items and affected items. See IRM 4.31.2.6.2, Extension of Statute at the Partnership Level. See also IRM 25.6.22.6.5.1 (8), below, for proper consent forms.

  5. If a consent agreement is not obtained from the Tax Matters Partner or other authorized person empowered to sign a consent with respect to all partners, either as a result of the fact that no consent could be secured after solicitation or because no consent was solicited at the TEFRA entity level, the statute for assessing any tax attributable to partnership items and affected items may be extended under IRC 6229(b)(1)(A) with respect to any partner by a properly executed consent entered into by the Secretary and such partner. If such consent is secured at the partner level, it must specifically provide that it extends the period for assessment of tax attributable to partnership items and affected items. Prior to October 29, 2009, this requirement was generally met through use of Form 872–I or Form 872–IA to secure a consent. On or after October 29, 2009, this requirement is met through use of Form 872 or Form 872–A bearing a revision date of 10-2009 (Rev. 10-2009).

  6. For situations where the general partner is a limited liability company (LLC) that is treated as a disregarded entity - although an LLC that is a disregarded entity is disregarded for all federal tax purposes under Treas. Reg. 301.7701-2(c)(2)(i) these regulations do not alter state law, which determines a partner's status as a general partner. The disregarded entity may be authorized to bind the partnership under state law. If the LLC’s single owner has no power to bind other partners as a general partner under state law, the single owner cannot step into the shoes of LLC and sign the consent, as the tax matters partner. Rev. Rul. 2004-88, 2004-2 C.B. 165 holds that an LLC that is a disregarded entity for federal tax purposes may be designated the tax matters partner of a partnership subject to the TEFRA partnership provisions when it is a general partner under state law. In order to avoid hazards of litigation, both the single member of the LLC and the LLC's manager under state law should sign any tax matters partner consent.

    Note:

    For employment tax returns for periods beginning on or after January 1, 2009, single-owner LLCs will no longer be classified as disregarded entities for employment tax purposes. See T.D. 9356, 72 F.R. 45891 (August 16, 2007).

  7. If a consent is secured at the TEFRA partnership level and there are non-TEFRA adjustments on partners' returns, separate consents with respect to non-TEFRA adjustments will need to be executed by each such partner. Use the consent procedures for the individual or entity partner returns.

  8. Consent forms used for TEFRA partnership statutes are:

    • Form 872–P — This form extends the statute to a fixed date for all partnership items and affected items flowing from the particular partnership

    • Form 872–O — This form is an open-ended statute date for all partnership items and affected items flowing from the particular partnership

    • Form 872–N — This form is used to terminate the open-ended extension on the Form 872–O

    • Form 872 revised 10-2009 — This form extends the statute to a fixed date for individual partners for TEFRA partnership items (and affected items) as well as all other adjustments to the partner's return

    • Form 872-A revised 10-2009 — This form is an open-ended statute date for individual partners for TEFRA partnership items (and affected items) as well as all other adjustments to the partner's return

      Note:

      Form 872–I and Form 872–IA were designated as obsolete on 10/29/09, when the TEFRA-related wording was included on the Form 872 and Form 872–A; however, consents recorded on the Form 872–I and Form 872–IA are still valid.

25.6.22.6.5.2  (08-26-2011)
Converted Partnership Items

  1. If TEFRA partnership items are converted to non-partnership items under IRC 6231(b), IRC 6229(f) provides that the statute for assessment of tax on the partner's return for these items shall not expire before the date that is one year from the date of conversion. This one–year period can be extended by consent.

  2. Form 872–F, Consent to Extend the Time to Assess Tax Attributable to Items of a Partnership That Have Converted Under Section 6231(b) of the Internal Revenue Code, or alternatively, when the examiner is attempting to protect the statute for both TEFRA and non-TEFRA items on the partner's return, Form 872 or Form 872–A bearing a revision date of 10-2009 (Rev. 10-2009) is used to extend the statute. Prior to October 2009, Form 872-I or Form 872-IA was used to extend the statute.

  3. A Form 872–F (or revised October 2009 Form 872 or Form 872-A) must be obtained for each partner's return that needs to be extended. One Form 872–F (or Form 872 or Form 872–A bearing a revision date of 10-2009 (Rev. 10-2009) or Form 872-I or Form 872-IA) does not cover all of the partners' returns.

  4. Unlike the Form 872 or Form 872–A bearing a revision date of 10-2009 (Rev. 10-2009) or Form 872-I or Form 872-IA, the Form 872–F only extends the statute on the partner's return for the converted partnership items.

  5. Defaulted Final Partnership Administrative Adjustment (FPAA) and court decisions are not conversions under IRC 6231(b). In these cases, the one–year assessment period can be extended by using the Form 872 or Form 872–A bearing a revision date of 10-2009 (Rev. 10-2009). Prior to October 2009 the Form 872–I or Form 872–IA was used to extend the one–year assessment period.

25.6.22.6.6  (08-26-2011)
Trusts

  1. Consents for trust returns (Form 1041, U.S. Income Tax Return for Estates & Trusts) including trusts related to Employee Plan returns (Form 5500, Annual Return/Report of Employee Benefit Plan), should be obtained in the name of the trust. The signature should show the name of the trust, followed by the name and designated title of the person or persons authorized by the trust instrument.

    Example:
    Name: "John Doe Trust "
    Signature: "John Doe Trust
    By Richard Roe, Trustee"
     

  2. A consent covering a return of a trust must be accompanied by Form 56, Notice Concerning Fiduciary Relationship, and the trust instrument.

  3. Use Form 872, Form 872-A or Form 872–H. For Employee Plan purposes, use only a Form 872 or Form 872–H. See IRM 25.6.22.6.13, Employee Plans, for additional details and preparation of Form 872–H related to Employee Plans.

  4. Where several trustees are appointed under a trust instrument, any one of the trustees may sign the consent, if the trust instrument provides that acts of one or more trustees are binding on all.

  5. If no single trustee's signature is binding on all the trustees, the names of all the trustees must be shown in the consent and Form 56. All trustees must sign the consent. This is true whether one or all trustees sign the filed return.

  6. Where a trust has been terminated, the trustees may not sign a consent. See instructions for transferee liability cases at IRM 25.6.22.6.17.1, Transferee Liability.

  7. For adjustments relating to assets held by a grantor trust, the period to keep open for assessment of tax is that of the owner whom the Service may assess. The filing of the grantor trust return does not start any period of limitations for items reported on that return, and a trustee does not have authority to execute a consent on behalf of the owner regarding those items. If there is a question as to whether or not the trust should be treated as a grantor trust, consents should be obtained from both the owner and trustee.

25.6.22.6.7  (08-26-2011)
Decedent's Estate (Income Tax – Form 1041)

  1. A consent covering the income tax return of an estate (Form 1041) should be in the name of the estate. The signature should show the name of the estate, followed by the name and designated title of the person or persons authorized to act for the estate. The authorized person is the executor, administrator, or other fiduciary.

    Example:
    Name: "Estate of John Doe"
    Signature: "Estate of John Doe,
    By Mary Doe, Executrix"
    Name: "Estate of John Doe"
    Signature: "Estate of John Doe,
    First National Bank, Executor,
    By Richard Roe"

  2. A consent covering an income tax return of an estate must be accompanied by Form 56, Notice Concerning Fiduciary Relationship, and the certified copy of letters of testamentary or court certificate certifying as to the present status of the estate, including the name of the present fiduciary and the fiduciary's capacity.

    1. Probate courts may have form certificates which are used by the court in furnishing certifications to the fiduciary.

    2. The certification by the court must not postdate the date of signature on the consent.

  3. Use Forms Form 872 or Form 872-A.

  4. Where several executors, administrators or other fiduciaries are appointed under a will, any one of them may sign the consent, if the will provides that acts of one or more personal representatives are binding on all.

  5. If no executor's or administrator's signature is binding on all the executors or administrators, the names of all the executors or administrators must be shown in the consent and Form 56. All executors or administrators must sign the consent and Form 56. This is true whether one or all sign the return which was filed.

  6. When an estate has been closed and the executor discharged, a valid consent cannot be secured, unless the former fiduciary petitions the court to re-open the estate. If there is no such re-opening, see the procedures pertaining to transferee liability cases at IRM 25.6.22.6.17.1, Transferee Liability.

25.6.22.6.8  (08-26-2011)
Decedent's Estates (Estate Tax – Form 706 series)

  1. There is no provision in the law for entering into an agreement to extend the statute of limitations for assessment of the estate tax imposed by Chapter 11 of the IRC.

  2. If distributions were made to heirs, the transferee liability rules can apply. See IRM 25.6.22.6.17.1, Transferee Liability.

25.6.22.6.9  (08-26-2011)
Gift Tax

  1. In gift tax cases in which the husband and wife have elected to split their gifts pursuant to IRC 2513, separate consent agreements will be prepared for each spouse. One consent will be prepared for the husband as donor with the wife as consenting spouse, and another for the wife as donor with husband as consenting spouse. Signatures of both spouses should appear on both sets of consents.

  2. Use Form 872 or Form 872–A.

25.6.22.6.10  (08-26-2011)
Employment Taxes

  1. The period for assessment of employment taxes can be extended by using the Form SS–10, Consent to Extend the Time to Assess Employment Taxes. This form is for the taxes imposed under the Federal Insurance Contributions Act (Form 941, Employer's Quarterly Federal Tax Return, Form 943, Employer's Annual Tax Return for Agricultural Employees, Form 944, Employer's ANNUAL Federal Tax Return), the Federal Unemployment Tax Act (Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return), the Railroad Retirement Tax Act (Form CT–1, Employer's Annual Railroad Retirement Tax Return, and Form CT–2, Employee Representative's Quarterly Railroad Tax Return), and IRC provisions relating to collecting income tax at the source on wages and other payments and distributions.

  2. The consent (Form 872, for example) obtained to extend the income tax return of the employer does not extend the period of time for assessment of employment taxes.

  3. The name of the controlling entity will be used in the consent. This is usually the name on the employment tax return.

  4. In the case of a sole proprietorship (Schedule C business), the primary taxpayer's name as shown on the employment tax return will be input on the Form SS–10 followed by "dba" (the abbreviation "for doing business as" ).

    1. If the taxpayer filed a joint return, the primary taxpayer is the person who owns the business, or exercises substantially all of the management and control of the trade or business. Following is an example where the Schedule C is operated by the wife on a joint return:

      Example:
      "Grace M. Bullock dba Veterinary Clinic"

  5. The instructions for signing the consent in various entity situations are as follows:

    1. Corporations — The consent should be signed by a corporate officer authorized to execute the consent. See discussion on those authorized to sign extensions for the income tax return at IRM 25.6.22.6.2, Corporations.

    2. Partnership — Any general partner authorized to bind the partnership may sign the consent, even if he/she did not sign the return.

    3. Limited liability company classified as either a partnership or corporation — any officer or other person authorized to bind the LLC under the terms of LLC operating agreement may sign the consent.

    4. For periods beginning before January 1, 2009, limited liability company classified as a disregarded entity — the single owner of the LLC must sign the consent even if the employment tax return was filed by the LLC.

    Note:

    For employment tax returns for periods beginning on or after January 1, 2009, single-owner LLCs will no longer be classified as disregarded entities for employment tax purposes. See T.D. 9356, 72 F.R. 45891 (August 16, 2007). If an LLC is not a disregarded entity for employment tax purposes, the consent must be secured from the LLC for employment tax issues. See IRM 25.6.22.6.17.9, Limited Liability Companies (LLCs), for instructions on securing consents for LLCs.

  6. For purposes of extending the period for FICA, FUTA, RRTA, and withholding taxes, the "tax periods from__ through __" are to include the periods being covered under the extension. More than one period may be covered by one Form SS–10.

    Examples:
    The Federal Unemployment Tax Act, for calendar years "1995 and 1996"
    The Federal Insurance Contribution Act, for tax periods "from January 1, 1995 through December 31, 1996"
    The Income tax withholding provisions of existing or prior revenue laws, for tax periods "from January 1, 1995 through December 31, 1996"
    The Railroad Retirement Act, for tax periods "from January 1, 1995 through December 31, 1996"

  7. A single consent may be used to extend the statute for the FICA, FUTA, withholding taxes, and the Railroad Retirement tax provided that the appropriate lines are completed on the consent form for the relevant type of tax.

  8. A single consent may be used to cover all quarterly returns filed for employment taxes as well as other returns which report the same type of employment taxes, if the taxpayer filed the other returns. For example, Form 941, Form 943, Form 944, Form 945, Annual Return of Withheld Federal Income Tax, all report income tax withholding. This is true for a consent covering a one year period of time or covering a period of more than one year.

  9. The statute of limitations for all timely-filed quarterly employment tax returns for a single calendar year expire at the same time. See IRC 6501(b)(2). Therefore, a consent should usually include all four returns.

  10. For conversion issues where FICA coverage is converted to RRTA coverage and Form CT–1(s) have been filed, care should be taken to cover both taxes (FICA and RRTA) on Form SS–10. Note that the statute date for RRTA is three years from the last day of the second month following the end of the tax year, or the date the Form CT–1 is filed, whichever is later.

  11. Transferee liability — Consent Form 4016 is used for extending the statutory period of limitations for assessment of employment taxes against a transferee, arising on liquidation or dissolution of a corporation or partnership, or on a reorganization within the provisions of IRC 368(a).

25.6.22.6.10.1  (08-26-2011)
Employment Taxes – Employee Share of FICA

  1. During an examination, assessments for the employee's share of FICA tax (IRC 3101) can be made against either the employer or the employee.

  2. The statute on the employee's share of FICA tax is determined by the statute date of the Form 941 filed by the employer. This is true regardless of the entity being assessed. The assessment statute date must be considered if the examiner intends to pursue the assessment against an individual employee. The statute date of the employee's share of FICA tax corresponds to the statute date of the employer's Form 941, not the employee's Form 1040 filing date.

  3. A Form SS–10, Consent to Extend the Time to Assess Employment Taxes, is used to extend the statute on either the employer's or employee's portion of FICA tax. The Form SS–10 can be secured from the employee on the employee's portion of FICA tax. However, examiners must ensure that the expiration dates that are being monitored for protection are those of the employer's Form 941. The Form SS–10 should specifically refer to the employee's liability for the employee's share of FICA tax by adding at the top of the consent form or in the blank, fillable portion (below paragraph (3)) of the form: "This consent applies to employee's share of FICA" .

  4. There are special instances when the mitigation provisions under IRC 6521 would allow an offset against the employee's payment of Self-Employment Tax, but the timing of the FICA Tax assessment, in relation to the expiration of the statute on Form 941 and Form 1040, becomes critical. Examiners are advised to take a conservative approach and protect the FICA tax statute rather than rely on the mitigation provisions.


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