4.4.9  Delinquent and Substitute for Return Processing

Manual Transmittal

August 23, 2012

Purpose

(1) This transmits revised IRM 4.4.9, AIMS Procedures and Processing Instructions, Delinquent and Substitute for Return Processing.

Material Changes

(1) Edited IRM 4.4.9.5.13 to correct the mailing address for Fresno Campus.

(2) Edited IRM 4.4.9.7.3.1 to add Priority Code 9 in Item 09 of Form 5344.

(3) Edited IRM 4.4.9.7.4.1 to remove incorrect statement for agreement date and added the term "Priority Code" for clarification to the definition of 9.

(4) Edited IRM 4.4.9.7.5.1 to remove incorrect statement for agreement date.

Effect on Other Documents

IRM 4.4.9 dated May 8, 2012 is superseded.

Audience

Large Business and International (LB&I), Small Business /Self-Employed (SB/SE), and Wage and Investment (W&I).

Effective Date

(08-23-2012)

Related Resources

AIMS website at http://mysbse.web.irs.gov/exam/mis/default.aspx

RGS website at http://mysbse.web.irs.gov/exam/rgs/default.aspx

Electronic Publishing website at http://publish.no.irs.gov

Karen M. Schiller
Director, Examination Planning and Delivery
Small Business/Self-Employed

4.4.9.1  (08-23-2012)
Introduction

  1. This section contains procedures for processing and closing delinquent returns secured by examiners and substitute for returns (SFR).

4.4.9.2  (08-23-2012)
Research

  1. Before forwarding a secured delinquent return for the posting of the Transaction Code (TC) 150, or requesting an SFR, the examiner must request research to determine if a return has been filed. Use Form 6882, IDRS/Master File Information Request, or perform online research using command codes TXMODA, IMFOL/BMFOL/INOLE, and TRDBV.

  2. The examiner should also research for the filing of a return under an invalid social security number (SSN). The invalid SSN is defined with an asterisk ("*" ) at the end of the SSN (nnn-nn-nnnn*).

  3. For Individual Master File (IMF) accounts, both the primary and secondary SSNs must be researched for prior filing and pending activity.

  4. The examiner should also research both primary and secondary invalid SSNs.

4.4.9.2.1  (05-08-2012)
Taxpayer Filed Return Before Contact From the Field

  1. There may be instances where the taxpayer filed a delinquent return with the campus after the SFR TC 150 has posted and before the case was assigned or opened by the group.

  2. If the return was processed by the campus, then TC 97X will be posted. This reflects the receipt of the return and generates an "-A" freeze on the account.

    Note:

    If the "-A" is on the account, it cannot be closed as a non-examined closure. The "-A" freeze has to be resolved.

  3. A TC 290 might also be posted to the account, which indicates the campus has posted the return information and additional tax has been assessed. If the taxpayer has not been contacted regarding an audit and the return has no audit potential, the case can be closed as a non-examined closure following the guidelines in IRM 4.4.21.2, Non-examined Closings. Use Disposal Code 32.

  4. If the taxpayer has been contacted regarding the audit, then follow the procedures outlined in IRM 4.4.9.6.3.2.1.

4.4.9.2.2  (05-08-2012)
Closing Controls if TP has Filed as the Spouse on a Joint Return

  1. If the examiner discovers that the non-filer taxpayer filed as the spouse on a joint return, the disposition of the case depends on the type of controls on the account.

    • If the examiner has controls for the primary SSN on the filed return or will establish controls on the primary SSN, transfer the time applied on the Examination Returns Control System (ERCS) on the non-filer case to the primary SSN's case. Complete Form 10904, Request for Record Deletion from AIMS, (Disposal Code 38) and forward the form to your Area AIMS/ERCS unit following local procedures.

    • If the examiner does not have controls for the primary SSN on the filed return nor plans on establishing controls, complete Form 10904 (Disposal Code 38) and forward the form, along with the documentation to support the disposal code, to the Area AIMS/ERCS unit following local procedures. Do not modify the time on the case.

4.4.9.2.3  (05-08-2012)
Integrated Data Retrieval System (Transcripts)

  1. Review Integrated Data Retrieval System (IDRS) transcripts to determine if any of the following are present:

4.4.9.2.3.1  (05-08-2012)
Criminal Investigation (CI) Freeze

  1. If a CI freeze ("–Z" ) is present on the account, coordinate with CI to determine if Examination can work the case.

  2. If CI approves, use Push Code 049 (joint investigation) on the requisition. This will cause the TC 424 to bypass the CI unpostable. A TC 150 does not need to be on the module to use Push Code 049. If there is no TC 150, the account will remain a skeletal record for 26 months and then age off of AIMS.

4.4.9.2.3.2  (05-08-2012)
TC 150 Present on Master File (MF)

  1. Do not send a delinquent return to the campus or request an SFR if a TC 150 has posted.

  2. See IRM 4.4.9.7 for instructions on processing the delinquent return after the TC 150 has posted.

4.4.9.2.3.2.1  (05-08-2012)
Dummy Present on MF

  1. A TC 150 posting with no tax liability followed by a TC 240 posting for $500 (W–4 penalty) indicates the campus has posted a dummy return. Any adjustments must be made as subsequent adjustments (e.g., TC 300).

4.4.9.2.3.3  (05-08-2012)
TC 595

  1. If research shows the taxpayer is in tax delinquent investigation (TDI) status (Master File Status 02 shown in the Master File History Section of a TXMOD), prepare Form 3177, Notice of Action for Entry on Master File, and fax to Centralize Case Processing (CCP) for the input of TC 595 with Closing Code 57 to close the Collection control. If the collection case is not closed, Examination and Collection may be working the case concurrently. Extreme care should be taken when using this transaction code since it will prevent the issuance of TDI notices to the taxpayer.

4.4.9.2.3.3.1  (05-08-2012)
Automatic TC 595

  1. For all tax years in TDI Status 03, inputting a TC 424 with a push code of 020, 021, 036 or 037 will automatically generate a TC 595.

  2. See Document 6036, Examination Division Reporting System Codes Booklet, or Document 6209, IRS Processing Codes and Information, for push code definitions.

4.4.9.2.3.3.2  (02-08-1999)
Reversing TC 595

  1. The TC 595 must be reversed by Examination if a determination is made to not pursue the examination. The posting of a TC 150 (not an SFR) also satisfies the TC 595 and a reversal is not necessary.

4.4.9.2.3.4  (05-08-2012)
Credits on the Module

  1. SFR - For both Business Master File (BMF) and IMF, the computer generated SFR will automatically freeze the prepayment credits.

    • BMF - The posting of the SFR TC 150 will generate a TC 570 if there are credits on the module when the SFR posts.

    • IMF - The posting of the SFR TC 150 will generate a TC 570 if there are credits on the module or credits post to the module after the SFR posts.

  2. Secured Returns (No TC 150 Posted) - If payments are posted to the module and you want to prevent the credits from refunding when the TC 150 posts, enter the following codes on Form 13133, Expedite Processing Cycle:

    • BMF - Enter an "X" in the box to the left of the CCC "X" .

    • IMF - Enter an "X" in the box to the left of the CCC "3" .

4.4.9.3  (05-08-2012)
Payments

  1. If payment is secured, prepare Form 3244-A, Payment Posting Voucher-Examination, following procedures found in IRM 4.4.24, Payments and Remittances.

4.4.9.4  (05-08-2012)
Establishing AIMS/ERCS Controls

  1. Before Automated Information Management System/Examination Return Control System (AIMS/ERCS) controls can be established, research must be conducted to ensure no return has posted to the taxpayer's account. See IRM 4.4.9.2.

  2. Most non-filer accounts are created at the campus. For non-filer cases that are created in the field, establish the non-filer account on AIMS/ERCS as soon as it is known that an examination will take place or when examination time is first applied. For secured delinquent returns, establish AIMS/ERCS control as soon as a return is secured or time is first applied, whichever is earlier.

4.4.9.4.1  (05-08-2012)
Form 5345, Examination Request

  1. Non-ERCS users complete Form 5345-B, Examination Request for Non-ERCS Users.

  2. ERCS users complete Form 5345-D, Examination Request for ERCS Users.

4.4.9.4.1.1  (05-08-2012)
Form 5345-B, Examination Request Non-ERCS Users

  1. When completing Form 5345-B to establish a non-filer directly on IDRS, include the following entries:

    1. Return Needed: do not leave blank which denotes return requested, since there is no return to request.
      Enter a "1" , which denotes No Return, Form 5546, Examination Return Charge-Out and Labels requested, or
      Enter a "3" , which denotes No Return, No Form 5546, and No Labels Requested.

    2. A push code must be used when establishing AIMS controls if no TC 150 is posted at Master File. The push code holds the TC 424 at Master File until a TC 150 posts.
      Use 020 for delinquent returns.
      Use 021 if no return is secured and an SFR is not desired at the present time.
      Use 036 to cause a computer generated SFR to post to Master File. If a CI freeze is present at Master File, the transaction will unpost.

      Note:

      If input before close of business Thursday, the TC 150 will post on Saturday (if the TC 424 does not unpost).


      Use 037 for potential Criminal Investigation Division (CID) Referral/Non-filer.
      Use 049 for cases where there is a CI "-Z" freeze and CI has approved establishing the SFR.

    3. Source Code
      Use 24 for non-filers not related to any other return.

      Note:

      This source code should rarely be used.


      Use 25 for the primary return of non-filers built in Memphis.
      Use a related non-filer source code for returns related to returns already open.

    4. Reason for Request must be entered and consistent with the push code used:
      If Push Code 020 - write: "DELINQUENT RETURN SECURED BY EXAMINATION" .
      If Push Code 021 - write: "NONFILER" .
      If Push Code 036 - write: "EXAM/SFR" .
      If Push Code 037 – write: "POTENTIAL CI / NONFILER" .
      If Push Code 049 - write: "JOINT INVESTIGATION: CI APPROVED" .

4.4.9.4.1.2  (05-08-2012)
Form 5345-D, Examination Request ERCS (Examination Return Control System) Users

  1. When completing Form 5345-D to establish a non-filer via ERCS, include the following entries:

    1. Do you want the original return? --- Answer "N" for no, since there is no return to request.

    2. Do you want Labels? --- "Y" for yes or "N" for no.

    3. Provide the appropriate push code for each tax period listed. A push code must be used when establishing AIMS controls if there is no TC 150 posted at Master File. The push code holds the TC 424 at Master File until a TC 150 posts.
      Use 020 for delinquent returns.
      Use 021 if no return is secured and an SFR is not desired at the present time.
      Use 036 to cause a computer generated SFR to post to Master File. If a CI freeze is present at Master File, the transaction will unpost.

      Note:

      If input before close of business Thursday, the TC 150 will post on Saturday (if the TC 424 does not unpost).


      Use 037 for potential CID Referral/Non-filer.
      Use 049 for cases where there is a CI "-Z" freeze and CI has approved establishing the SFR.

    4. Source Code:
      Use 24 for non-filers not related to any other return.

      Note:

      This source code should rarely be used.


      Use 25 for the primary return of non-filers built in Memphis.
      Use a related non-filer source code for returns related to returns already open.

    5. Reason for Request must be entered and consistent with the push code used:
      If Push Code 020 - write: "DELINQUENT RETURN SECURED BY EXAMINATION" .
      If Push Code 021 - write: "NONFILER" .
      If Push Code 036 - write: "EXAM/SFR" .
      If Push Code 037 – write: "POTENTIAL CI / NONFILER" .
      If Push Code 049 - write: "JOINT INVESTIGATION: CI APPROVED" .

4.4.9.4.2  (05-08-2012)
AIMS Control When TP Does Not Have a TIN

  1. For returns where the taxpayer does not have a taxpayer identification number (TIN), the group should request the taxpayer submit Form SS-4, Application for Employer I.D. Number, for an employer identification number (EIN) to the IRS, or Form SS-5, Application for a Social Security Number Card (Original, Replacement or Correction), for an SSN to the Social Security Administration (SSA). Request the taxpayer furnish the IRS with the SSN assigned by SSA as soon as possible. If the taxpayer is not eligible for an SSN but is eligible for an IRS individual taxpayer identification number (ITIN), the taxpayer should submit Form W-7, Application for IRS Individual Taxpayer Identification Number (ITIN), with the IRS.

  2. In the interim, the group should request a "dummy" TIN (via Command Code AMTIN7) from the local AIMS/ERCS unit. Establish Non-Master File (NMF) AIMS control using Form 5354, Examination Request Non-Master File. See IRM 4.4.23.3.2.1, Reasons for NMF, for additional information. The NMF control is to provide AIMS/ERCS controls until a TIN is secured. After the TIN is secured, close the NMF control with Disposal Code 28.

  3. If the taxpayer will not request his/her own EIN, contact the campus entity control section to obtain the assignment of a permanent EIN.

  4. A computer generated SFR cannot be done on a temporary or invalid TIN.

    Note:

    IRS ITINs are considered valid TINs.

  5. The case cannot be forwarded to Centralized Case Processing (CCP) for closing unless a TIN has been secured.

4.4.9.5  (05-08-2012)
Delinquent Return Secured - No TC 150 Posted

  1. Upon receipt of a delinquent return, ensure the following items are completed:

4.4.9.5.1  (05-08-2012)
Name

  1. The taxpayer's name must be typed or printed legibly, with no strikeovers. The name used with a recently acquired EIN should match the taxpayer's Form SS-4.

4.4.9.5.1.1  (02-01-2006)
Incorrect Name

  1. If the name is not correct, prepare or secure a corrected return and solicit the taxpayer’s signature on the corrected delinquent return. Mark an "X" across the face of the incorrect return. Write the word "Invalidated" , sign, and date below the notations. Keep the invalidated return in the case file.

4.4.9.5.2  (05-08-2012)
Address

  1. Verify with the taxpayer the address shown on the return is the taxpayer's current address. If it is not, cross out the address on the return and enter the taxpayer's current address. Compare the address on the return with the address on ENMOD or INOLES. The posting of the return will update the address at Master File but it will delay the posting of the TC 150 by one cycle. If the address is different and you do not want a one cycle delay, prepare a Form 2363, Master File Entity Change, reflecting the address change and fax it to CCP. Fax numbers for CCP can be found in the contact listing posted to the AIMS website at http://mysbse.web.irs.gov/exam/mis/contacts/default.aspx

4.4.9.5.3  (05-08-2012)
SSN/EIN

  1. Verify the TIN shown on the return is correct by researching Master File. If the taxpayer does not have a TIN, see IRM 4.4.9.4.2.

4.4.9.5.4  (05-08-2012)
Forms and Schedules

  1. Verify all required forms and schedules are present and the computations are correct.

4.4.9.5.5  (02-08-1999)
Signature

  1. Verify the presence of the taxpayer’s original signature and the date the return was signed.

4.4.9.5.6  (05-08-2012)
Prior Year Return

  1. To call attention to a prior year return, enter the tax period in "YYYYMM" format in bold numbers above the tax period printed on the form. If the appropriate tax year form was not used, Submission Processing will accept a current year form.

4.4.9.5.7  (02-08-1999)
Date Received

  1. Date stamp the delinquent return when it is received. If a date stamp is not available, annotate on the return in the upper left side margin, "Received" , the date received, and the examiner’s name and title.

4.4.9.5.8  (05-08-2012)
Research Master File/Establishing Case on ERCS/AIMS

  1. Business Master File (BMF) - Check ENMOD or INOLES.

    • Does the entity already exist? If it does not, complete a Form 2363 and fax to CCP. To create a tax module, enter an "X" in box to the right of the Trans Code 000 and enter the earliest tax year that is being worked.

    • Fax the request to CCP.

      Note:

      If input successfully, the tax module will establish the Monday after the 2nd weekend from the input date.

    • Do not send the return to Submission Processing until the tax module is created.

    • ERCS controls can be requested even though an tax module does not exist.

    • AIMS controls cannot be requested until the tax module is created.

  2. Individual Master File (IMF) - Check ENMOD, INOLES, or IMFOL and TRDBV.

    Note:

    Also search for invalid SSNs. See IRM 4.4.9.2 (2) for explanation of invalid SSNs.

    • An account does not have to exist for an IMF return to post.

    • The posting of an IMF TC 150 will create the module.

    • ERCS controls can be requested even though an account does not exist.

    • AIMS controls cannot be requested until the account is created either by the posting of the return, or submission of Form 2363.
      To create an account using Form 2363, enter an "X" in the box to the right of the Trans Code 000 and enter the earliest tax year that is being worked. Fax the form to CCP.http://mysbse.web.irs.gov/AboutSBSE/aboutccs/ccsprog/casepro/cp/pro/21596.aspx

      Note:

      If input successfully, the account will establish the Monday after the 2nd weekend from the input date.


      If an account is being created, do not send the return to Submission Processing until the account is created.

4.4.9.5.8.1  (05-08-2012)
Filing Requirement

  1. BMF: Displayed as "Filing Requirements" on ENMOD and INOLES.

    • For income tax returns, check to see if there is a filing requirement for an income tax return. If there is a filing requirement, ensure it is consistent with the secured return.

      Example:

      If the filing requirement is for a Form 1065, U.S. Return of Partnership Income, or Form 1120S, U.S. Income Tax Return for an S Corporation, and a Form 1120, U.S. Corporation Income Tax Return, is secured, a Form 2363 must be completed (check Item 016, Change misc. codes), enter the appropriate filing requirement code and fax to CCP. See Document 6209, IRS Processing Codes and Information, for a list of filing requirement codes.

    • If no filing requirement is present, it is not necessary to create one unless you are attempting to post a Form 1120S. Entity must show an 1120S election was filed or the TC 150 will unpost (Unpostable Code (UPC) 310 with Reason Code (RC) 4). For all other returns, the posting of the return will create the filing requirement.

    • For non-income tax returns, a filing requirement is not necessary. The posting of the return will create a filing requirement.

      Note:

      This does not apply to Form 990, Return of Organization Exempt From Income Tax.

  2. IMF: Displayed as MAIL-FR>XX on ENMOD; Displayed as MFR XX on INOLES.

    • A filing requirement is not necessary. The posting of the return will create a filing requirement.

4.4.9.5.9  (05-08-2012)
Photocopy the Return

  1. Make a copy of the delinquent return to maintain in the case file. On the copy, write in red on the top margin "COPY OF RETURN" . The original return will be filed under the TC 150 document locator number (DLN). The examination should be conducted using "Electronic Print Procedures" . The original return will remain filed under the TC 150 DLN and will be identified as the controlling DLN even after the examination case is closed.

4.4.9.5.10  (05-08-2012)
Original Return

  1. Write in red on top margin of the original return, "DELINQUENT RETURN SECURED BY EXAMINATION" . The original return WILL NOT be returned to the group but will be filed under the TC 150 DLN and will be identified as the controlling DLN even after the examination case is closed.

4.4.9.5.11  (05-08-2012)
Form 13133, Expedite Processing Cycle

  1. Attach a completed Form 13133, Expedite Processing Cycle, to the front of EACH return, paying special attention to the following:

    • Check box for "DELINQUENT RETURN." It is essential that a separate Form 13133 be prepared for each tax period. If there are multiple tax periods for the same taxpayer, indicate on the first Form 13133, "BLOCK TOGETHER—Related tax periods/do not separate" .

    • Contact name - This can be the examiner's information or the group secretary.

  2. Per IRM 3.30.123.7.1.3, Processing Timelines: Cycles, Criteria and Critical Dates, any return with a Form 13133 attached is given a 6 day expedite cycle.

4.4.9.5.11.1  (05-08-2012)
Penalties

  1. If penalties are to be assessed, make NO notations in the penalty area of the Form 13133. Failure to pay (FTP), failure to deposit (FTD), failure to file (FTF), and estimated tax penalty (ESP), are all automatically computer generated and assessed if applicable.

    Note:

    Certain penalties such as the fraudulent failure to file (FFTF) penalty, cannot be assessed during the initial processing of the return. This penalty must be put on a revenue agent's report (RAR), a Form 5344, Examination Closing Record, prepared and assessed as a partial or during the final closing of the examination. See IRM 25.1.7.7, Assessment Procedure for the Fraudulent Failure to File (FFTF). If an "R" is entered on the Form 13133, the previously assessed FTF will not need to be abated before assessing the FFTF. Also see IRM 20.1.2.2.7.5, Fraudulent Failure to File - IRC 6651(f).

  2. If penalties are NOT to be assessed during the initial processing of the TC 150, notate this on the Form 13133 by putting an "X" in the box to the left of the applicable Computer Condition Codes/Return Processing Code.

    IMF CCC Definition
    M Do NOT assess Failure to Pay Penalty
    P Do NOT assess Estimated Tax Penalty
    R Do NOT assess Failure to File Penalty

    BMF CCC Definition
    D Do Not assess Failure to Pay Penalty
    J Do Not Assess Failure to Deposit Penalty
    (Forms 720, 940, 941, 943, 945, and 1042)
    R Do Not assess Failure to File Penalty
    8 Do Not assess Estimated Tax Penalty

4.4.9.5.12  (05-08-2012)
Statute Issues

  1. Secured delinquent returns may have refund statute expiration date (RSED) and assessment statute expiration date (ASED) issues.

4.4.9.5.12.1  (05-08-2012)
Refund Statute Expiration Date (RSED)

  1. If the IRS received date is later than the RSED but the postmark is on or prior to the RSED, DO NOT enter a computer condition code (CCC) on Form 13133. By NOT entering a CCC, the campus will forward the delinquent return to the statute unit. The statute unit will code the return to allow a refund to be released if it is a refund return. The refund will not be released if this process is not followed.

4.4.9.5.12.2  (05-08-2012)
Assessment Statute Expiration Date (ASED)

  1. If the normal ASED would have expired or is within 3 months of expiring had the return been timely filed, a code must be entered on Form 13133. This is necessary for the return to bypass the statute unit. Since Examination has verified the ASED, it is not necessary to send the return to the statute unit. On the Form 13133 place an "X" in the box to the left of the:

    1. "K" for IMF

    2. "W" for BMF

4.4.9.5.13  (08-23-2012)
Sending the Returns to Submission Processing

  1. After all the steps above are completed, the delinquent return, Form 13133 and Form 3210, Document Transmittal, must be mailed to Submission Processing at the appropriate campus using the table below.

    IMF Addresses

    IF an IMF Return THEN send to
    with international aspects, Internal Revenue Service
    Austin, TX 78741
    with international aspects, and a street address is required, IRS-Stop 6054 AUSC
    3651 S Interstate 35
    Austin, TX 78741
    with no international aspects, Internal Revenue Service
    5045 E Butler
    Stop 31305
    Fresno, CA 93727

    BMF Addresses

    IF a BMF Return THEN send to
    with international aspects is secured and a street address is required (both LB&I and non-LB&I groups),
    IRS - Stop 6054
    1973 North Rulon White Blvd.
    Ogden, UT 84404
    OR
    Internal Revenue Service
    PO Box 409101
    Ogden, UT 84409
    is secured by an LB&I group with no international aspects, IRS-Stop 6054
    1973 North Rulon White Blvd.
    Ogden, UT 84404
    is secured by a group (not LB&I) with no international aspects, IRS - Stop 31
    201 W. Rivercenter Blvd.
    Covington, KY 41011

4.4.9.5.13.1  (05-08-2012)
Monitoring for the Posting of the TC 150

  1. The group will monitor for the posting of the TC 150. The ERCS Overage Requisitions Report may be helpful in monitoring for the posting.

  2. When the TC 150 posts, AIMS and ERCS will become full records.

  3. If AIMS and ERCS do not become full records within 6 weeks, the steps outlined below must be followed.

  4. Review CC TXMOD

    1. If pending (PN) TC 150, wait 1-2 weeks for TC 150 to post.

    2. If rejected (RJ) TC 150, the return may not post for some time. For BMF, refer to IRM Exhibit 3.12.38-21, Error Resolution - BMF General Instructions, if the ERS-STS-CD is present. For IMF, refer to IRM 3.12.37, Error Resolution - IMF General Instructions.

  5. Research CC UPTIN to see if TC 150 unposted.

    1. UPC and reason code identifies the reason why the transaction went unpostable. Refer to Document 6209, Section 8.

    2. Status Code identifies the status of the unpostable.
      A = Opened/Assigned
      B = Special Closure
      C = Suspense

    3. Contact the local AIMS/ERCS analyst who will in turn contact the person working the unpostable to offer assistance in resolving the unpostable.

  6. Research prior and subsequent tax periods to see if return posted to the wrong tax period. If so, contact CCP and request that reprocessing procedures be initiated.

  7. If after 8 weeks there is no record of a posted TC 150, pending TC 150, rejected TC 150 or unposted TC 150, resubmit the return to submission processing. Notate on the copy of the return "Original return was lost, process as original" .

4.4.9.5.14  (05-08-2012)
Group Procedures After Delinquent Return TC 150 Has Posted

  1. Follow normal examination procedures paying special attention to the following:

    • Use the amounts from the delinquent return as the starting figures on the RAR.

    • Notate in red at the top of the return copy "Copy of Return" and include in case file.

    • In report generation software (RGS), click the radio button identifying the return as an "Electronic Print" to ensure proper blocking series on the Form 5344.

4.4.9.5.14.1  (05-08-2012)
No Change to Original Return

  1. If no changes are warranted, close case as a no-change case and include the following entries on the Form 5344:

    • Item 13, Disposal Code - 01.

    • Item 37, Delinquent Return - This entry should reflect a "T" for the first return secured, an "R" for the subsequent returns secured. See IRM 4.4.12.4.47, Item 37: Delinquent Return, for additional information.

    • Item 414, Delinquent Return Amount - This entry should reflect the refund or balance due shown on the return. See IRM 4.4.12.4.72, Item 414: Delinquent Return Amount, for additional information.

  2. Prepare a "no change" RAR.

4.4.9.5.14.2  (05-08-2012)
Changes to Original Return

  1. If changes are warranted, follow normal closing procedures for changed cases but include the following entries on the Form 5344:

    • Item 12, Transaction Code 160 - The delinquency penalty must be addressed on late filed returns. Enter the applicable delinquency penalty or a zero if the delinquency penalty will not be asserted.

    • Item 13, Disposal Code - Use the applicable disposal code of the examination: agreed, unagreed, etc.

    • Item 37, Delinquent Return - This entry should reflect a "T" for the first return secured, an "R" for the subsequent returns secured. See IRM 4.4.12.4.47, Item 37: Delinquent Return, for additional information.

    • Item 414, Delinquent Return Amount - This entry should reflect the refund or balance due shown on the return. See IRM 4.4.12.4.72, Item 414: Delinquent Return Amount, for additional information.

4.4.9.5.15  (05-08-2012)
Forward Case to Centralized Case Processing or Technical Services if Unagreed.

  1. For agreed cases: send case to CCP with a Form 3198, Special Handling Notice for Examination Case Processing, with the following notated in the comments section: "Secured Delinquent Return, Accepted as Filed - DC 01" or "Secured Delinquent Return, additional adjustments" .

  2. For unagreed cases: follow normal unagreed procedures and forward case to technical services.

4.4.9.5.16  (02-01-2006)
Centralized Case Processing Closing Procedures

  1. Follow normal closing procedures for changed or no-change with adjustments cases. Pay special attention to the following:

    • For changed cases, ensure the RAR started with the amounts from the original return.

    • For no-changed cases, ensure DC 01 is entered in Item 13.

    • For all cases, ensure Item 37 and 414 are present.

4.4.9.6  (05-08-2012)
Substitute for Return

  1. Substitute for return procedures are applicable when the return due date and extended due date has passed and all efforts have been exhausted to secure a return from a taxpayer. An SFR will not be generated if there is a Criminal Investigation (CI) freeze on the account.

    • If an SFR has not posted, see IRM 4.4.9.6.2.

    • If an SFR has already posted to Master File, see IRM 4.4.9.6.3.


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