4.4.25  Quick Assessments

Manual Transmittal

July 26, 2012

Purpose

(1) This transmits revised IRM 4.4.25, AIMS Procedures and Processing Instructions, Quick Assessments.

Material Changes

(1) This IRM was revised as follows:

IRM Reference Description of Changes
All sections Minor editorial changes have been made throughout this IRM. Website addresses, legal references, and IRM references were reviewed and updated as necessary. Also, various sections were updated to identify group responsibility and Centralized Case Processing (CCP) responsibility.
IRM 4.4.25.2 This section has been revised to include additional situations requiring quick assessments and renumbered accordingly.
IRM 4.4.25.3 Revised to include additional instructions for the group and Campus Examination.
IRM 4.4.25.3.2 Renumbered this section to IRM 4.4.25.3.1.
IRM 4.4.25.3.3 Moved this information to CCP responsibility in IRM 4.4.25.10.
IRM 4.4.25.3.4 Moved this information to CCP responsibility in IRM 4.4.25.10.
IRM 4.4.25.3.5 This section is obsolete. New instructions are provided in IRM 4.4.25.7 and IRM 4.4.25.8.
IRM 4.4.25.4 Moved this information to IRM 4.4.25.11 and updated instructions.
IRM 4.4.25.5 Moved this information to IRM 4.4.25.12 and updated instructions.
IRM 4.4.25.6 Moved this information to IRM 4.4.25.10 and updated instructions.
IRM 4.4.25.7 Moved this information to IRM 4.4.25.13 and updated instructions.
IRM 4.4.25.8 Moved this information to IRM 4.4.25.14 and updated instructions.
IRM 4.4.25.9 Moved this information to IRM 4.4.25.15 and updated instructions.
IRM 4.4.25.9 Retitled and included instructions for quick assessments on the First-Time Homebuyer Tax Credit (FTHBC).

Effect on Other Documents

IRM 4.4.25 dated August 1, 2003 is superseded.

Audience

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

Effective Date

(07-26-2012)

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

4.4.25.1  (07-26-2012)
Introduction

  1. This chapter contains information and procedures on processing quick/prompt assessments. The term "quick" is used throughout the text although it applies to both quick and prompt assessments unless noted. The difference between the terms "quick" and "prompt" is that the notice on a quick assessment will be sent to the taxpayer, while on a prompt assessment, the notice is sent to an IRS employee, usually a revenue officer. Otherwise, the procedure for input is the same.

  2. A quick assessment is input to Integrated Data Retrieval System (IDRS) as a "manual assessment."

  3. The procedures in this chapter are primarily applicable to Area, Centralized Case Processing (CCP) and Technical Service employees. Wage and Investment and Appeals employees may use these procedures as a supplement to their procedures if desired.

4.4.25.2  (07-26-2012)
Situations Requiring Quick Assessments

  1. Situations requiring quick assessment action are as follows:

4.4.25.2.1  (07-26-2012)
Agreed Unpaid Deficiencies Greater Than $100,000

  1. Agreed, over $100,000 deficiencies of income, estate, gift, and certain excise taxes, including penalties that are NOT full paid and CANNOT be assessed within 30 days of when the agreement is received by the Service. Refer to , IRM 4.4.25.4.1, IRM 4.4.25.4.2 and IRM 4.4.25.5 for quick assessment procedures. (For Tax Equity Fiscal Responsibility Act of 1982 (TEFRA) cases, see IRM 4.31, Pass-Through Entity Handbook).

4.4.25.2.2  (07-26-2012)
Statute of Limitations Less Than 60 Days

  1. For cases with statute of limitations expiring within 60 days, see IRM 4.4.25.4 for special processing procedures.

    Note:

    During the month of December, CCP and Campus Examination are required to follow quick assessment procedures for cases with less than 90 days on the Assessment Statute Expiration Date (ASED). This allows the organization time to fix an unpostable situation once the January dead cycles are over.

4.4.25.2.3  (07-26-2012)
Assessments $100,000,000 or Greater

  1. Quick assessments cannot be transferred to Master File (MF) for amounts of $100,000,000 (100 million) or more.

  2. If the case is being worked in CCP, they will split and process these as multiple assessments on separate documents. CCP will also alert the campus accounting function by phone that the assessment is being split due to the large assessment.

  3. Campus examinations rarely involve assessments of $100,000,000 or more. If the campus examination involves an assessment greater than or equal to $100,000,000, a designated employee will:

    1. Split and process the assessment as multiple assessments on separate assessment documents, and

    2. Alert the campus accounting function by phone that an assessment is being split due to the large assessment.

4.4.25.2.4  (07-26-2012)
Amended Return

  1. Taxable amended returns received within 120 days of the ASED - The group examiner will follow the procedures below for assessing the taxable amended return:

    1. Incorporate the changes from the taxable amended return into Form 4549, Income Tax Examination Changes.

    2. Close the return as an "Expedite" closure and annotate Form 3198, Special Handling Notice for Examination Case Processing, accordingly.

4.4.25.2.5  (07-26-2012)
IRC 6707A, Penalty for Failure to Include Reportable Transaction Information With Return

  1. For IRC 6707A cases where the statute of limitations will expire within nine months, see IRM 4.32.4.8.2,IRC 6707A, Penalty for Failure to Include Reportable Transaction Information With Return. for special processing procedures.

4.4.25.2.6  (07-26-2012)
IRC 6871, Claims for Income, Estate, Gift, and Certain Excise Taxes in Receivership Proceedings, Etc.

  1. Deficiencies involving receivership cases under IRC 6871. Follow the quick assessment procedures outlined in this IRM and procedures in IRM 4.27.3, Bankruptcy - Review and Processing Procedures.

4.4.25.3  (07-26-2012)
Required Research, Area Office Group and Campus Examination Procedures

  1. Quick assessments can be initiated in the Area Office or in Campus Examination. The area initiating the quick assessment should:

    1. ALWAYS obtain account research data that is not more than 30 days old when a quick assessment is warranted.

    2. Research the taxpayer's account using Integrated Data Retrieval System (IDRS) command code(s) TXMOD, IMFOL, or BMFOL. IMFOL or BMFOL will alert you to the possible filing of an amended return, payment information, verification of the taxpayer's current address, etc. An IDRS history item on TXMOD can alert you to the possibility of a quick assessment already in process. The history item would be shown as "MAAS09012011" , which translated means a manual assessment (MAAS) with a 23C date (assessment date) of September 1, 2011.

    3. If a balance due notice is to be sent to a different address, for example, if one of the taxpayers is no longer living at the address shown on the original return, a notation should be made on Form 3198 in the "Other Instructions" section of the new address for that taxpayer.

4.4.25.3.1  (07-26-2012)
Recoverable Retention Register (RRR)

  1. Older, inactive tax periods are moved to the RRR.

  2. In the rare event you are trying to make an assessment on a year you do not have Automated Information Management System (AIMS) and/or Examination Return Control System (ERCS) controls on and the return has been moved to the RRR, see IRM 4.4.23, Openings, for procedures on bringing returns back from the RRR.

  3. While the account is being brought back from MF, a quick assessment will be necessary. See IRM 4.4.25.4.1 for quick assessment procedures when the case is not ready for final closure.

4.4.25.4  (07-26-2012)
Statute of Limitations Less Than 60 Days (Special Processing), Area Office Group and CCP Procedures

  1. If the case file is ready for final closure, but the statute of limitations will expire in less than 60 days, follow the instructions in IRM 4.4.25.4.1 and IRM 4.4.25.4.2. The tax will be assessed as a quick assessment.

  2. The case file will remain in the group status and will be closed after confirmation of the assessment. See IRM 4.4.25.4.2.

4.4.25.4.1  (07-26-2012)
Case File Not Ready for Final Closure, Area Office Group Responsibility

  1. If a signed agreement is received on a case requiring a quick assessment and the case file is not ready for final closure, the assessment can be input as a quick assessment. Include the following statement in the "Remarks" section of the fax form, "Statute Imminent ASED expires MM/DD/YYYY" . Fax the forms below to the appropriate CCP office:

    1. Form 5344, Examination Closing Record, completed with the taxpayer's name, taxpayer identification number (TIN), MFT and year,

    2. Form 3198 completed as appropriate,

    3. Form 4549 signed by the taxpayer,

    4. Form 2285, Concurrent Determinations of Deficiencies, when carry back issues and restricted interest may apply, and

    5. Form 3210, Document Transmittal, completed as appropriate.


    Fax numbers for CCP are located at http://sbse.web.irs.gov/CCP/Exam/Exam.htm

  2. Do not update ERCS out of the group status and do not send your entire case file to CCP.

    Note:

    Allow at least 10 business days from your original request before following up with CCP.

4.4.25.4.2  (07-26-2012)
Case File Not Ready for Final Closure, CCP Responsibility

  1. Upon receipt of the faxed documents from the group, CCP will:

    1. Acknowledge your request within 48 hours of receipt.

      Exception:

      Requests received on Friday afternoon will be acknowledged by close of business the following Monday.

    2. Complete the assessment within 5 business days whenever possible. Assessments involving complex and restricted interest computations may take longer.

    3. Stamp Form 5344"Request Completed."

    4. Fax a copy of Form 5344 back to the group for association with the original case file to verify the assessment was completed.

4.4.25.5  (07-26-2012)
Case Closure After Quick Assessment, Area Office Group Procedures

  1. If a quick assessment was previously input, the case file will be processed and forwarded to CCP in Status 51 as a regular agreed case. Form 5344, will show Disposal Code 03 with a TC 300 of zero and the amount of the quick assessment in Item 35, Manual Assessment Amount.

  2. If the case file contains a deficiency year and an overassessment year, the overassessment credit can be applied to the tax on the deficiency year. Annotate Form 3198 in the "Other Instructions" section to apply the overassessment from tax year 20XX to the deficiency year.

  3. If there are available credits to offset the deficiency from a year other than the year requiring a quick assessment, complete Form 3870, Request for Adjustment, accordingly. Annotate Form 3198 in the "Other Instructions" section Form 3870 is enclosed in the case file.

    Note:

    The quick assessment will not post to MF for approximately six weeks and will post with an accompanying TC 370. CCP maintains copies of all quick assessment documents for verification purposes.

4.4.25.6  (07-26-2012)
TEFRA Defaulted Final Partner Administrative Adjustment (FPAA) Quick Assessments

  1. There may be instances when a quick assessment is necessary on a defaulted Tax Equity and Fiscal Responsibility Act (TEFRA) FPAA return. To ensure the Chief Financial Office (CFO) correctly classifies TEFRA assessments, Technical Services will follow the procedures below:

    1. Enter Disposal Code (DC) 10 in Item 13 of Form 5344.

    2. Annotate on the second page of Form 3198 in the "Instructions for CCP - Investor and/or Key Case Information" section and check the box titled, "TEFRA FPAA Default Quick Assessment - Exam Agreed Blocking Series."

  2. CCP will check the box on Form 2859, Request for Quick or Prompt Assessment, titled "Exam Agreed 130-132."

4.4.25.7  (07-26-2012)
Quick Assessments on Civil Penalties, Form 8278, Assessment and Abatement of Miscellaneous Civil Penalties, Area Office Group Procedures

  1. Quick assessment procedures only apply to civil penalties where the ASED is less than 60 days.

  2. Complete Form 8278 according to the instructions on the form. Ensure you are using the most current version of Form 8278.

    Exception:

    If you are asserting a penalty under IRC 6676, Erroneous Claim for Refund or Credit, complete Form 3870 for married filing joint accounts under Masterfile Tax Class (MFT) 30 accounts using penalty reference number (PRN) 687.

  3. Forward the case file to CCP and annotate Form 3198 accordingly.

4.4.25.8  (07-26-2012)
Quick Assessments on Civil Penalties, Form 8278, CCP Procedures

  1. Prepare Form 2859, according to the Form 8278.

  2. Follow the instructions in IRM 4.4.25.12, IRM 4.4.25.13, and IRM 4.4.25.14 for fax instructions, follow up procedures, and verification of the quick assessment.

  3. Civil penalties are not controlled on AIMS. Therefore, after a civil penalty quick assessment has been input to MF, the entire civil penalty file will be sent to Files in the campus for refiling under the quick assessment Document Locator Number (DLN).

4.4.25.9  (07-26-2012)
Quick Assessments on First-Time Homebuyer Tax Credit (FTHBC), CCP, or Campus Examination Procedures

  1. If it is necessary to input a quick assessment to disallow the FTHBC, see IRM 21.6.4.4.19.4, Tax Computation/Tax Period Changes, Manually Adjusting the Recapture Amount. It is very important to following the procedures in this IRM to prevent unpostables. Since quick assessments do not use reference numbers, just transaction codes, the quick assessment will not update the information on the IDRS command code IMFOLF (FTHBC entity screen)., therefore, IMFOLF will have to be manually updated with the appropriate reference numbers.

4.4.25.10  (07-26-2012)
Research and Actions Required Prior to Quick Assessment, CCP or Campus Examination Procedures

  1. Research IDRS CC TXMOD to determine if a payment has been made on the account, but has not posted to MF.

  2. Input a history item on TXMOD, "MAAS with the 23C date," to alert other IRS employees that an assessment is in the process of being posted. The history item will also prevent a manual refund of any payments sitting on the account that should be used to pay the deficiency.

  3. Also input on TXMOD, "HOLDDOC51" , which translates to holding for the Document Code 51 (assessment document). This action will cause the module to stay active on IDRS until a Doc Code 51 posts to MF.

  4. Research CCs INOLES, IMFOLE, BMFOLF, AMDIS or ENMOD to verify the most current address for the taxpayer.

4.4.25.11  (07-26-2012)
Quick Assessment Procedures, CCP or Campus Examination Procedures

  1. There are two types of quick assessments:

    1. A quick assessment is done via fax if the ASED will expire within 60 days, but at least two days are left on the ASED.

      Note:

      The accounting function must be called to advise them a quick assessment is being faxed.

    2. A quick assessment is done via telephone if the ASED is within two days of expiring. A telephone assessment is made to the accounting function in the campus.

  2. Form 2859 is used to request a quick assessment. Include Form 8278 if applicable.

4.4.25.11.1  (07-26-2012)
Form 2859

  1. Requests for quick assessments will be made to the campus accounting function, accounting and control section, on Form 2859. Instructions for completing Form 2859 are located on page 5 of the form. In addition:

    1. Indicate in "Remarks" if billing needs to be withheld and if the bill is to be mailed to two different addresses. Include both addresses in this section.

    2. Also indicate in "Remarks" if the assessment is a partial assessment and the case will not be closed to the campus at this point.

    3. Enter the 23C Date.

    4. Enter an agreement date only if the taxpayer signed an agreement.

    5. Do NOT compute interest on civil penalty assessments.

    6. If an assessment if being input on an MFT 31 module, enter "MFT 31" in the "Remarks" section of Form 2859.

4.4.25.11.1.1  (07-26-2012)
23C Date

  1. Following is a table used to determine the 23C date based on when the assessment statute will expire:

    How to Determine the 23C Date
    STATUTE DATE 23C DATE
    IF the statute date will expire: THEN the 23C date will be:
       
    within two days the same day that the assessment is faxed to the accounting function
       
    in more than two days the fifth work day after the assessment is faxed to the accounting function

4.4.25.11.1.2  (07-26-2012)
Blocking Series

  1. The blocking series for Quick assessments are:

    • Agreed Exam: 130-132

    • Unagreed Exam: 133-134

    Note:

    Block TEFRA defaulted FPAA cases with an agreed blocking series when requesting a quick assessment.

  2. The blocking series for Prompt Assessments are:

    • Agreed Prompt: 150-154

    • Unagreed Prompt 155-159

4.4.25.11.1.3  (07-26-2012)
Change in Withholding Credits

  1. A quick assessment may involve a change in withholding credits.

    1. Use Part C, line 19 to establish withholding credits not previously posted to MF, such as from a new Form W-2, Wage and Tax Statement.

    2. Use Part C, line 20 to reduce withholding credits previously posted to MF.

4.4.25.11.1.4  (07-26-2012)
Reference Number Adjustment

  1. Adjustments to item reference numbers from Form 5344 cannot be made as part of the quick assessment. These reference numbers must be updated separately in Item 15 at the time of final closing.

  2. The item reference numbers for employment tax Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return, 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, and Form 945, Annual Return of Withheld Federal Income Tax, will be entered in Part D, per the instructions on Form 2859.

4.4.25.11.1.5  (07-26-2012)
Excess Credits On Account

  1. If excess credits are on the account requiring a quick assessment, enter a TC 570 with a zero amount to prevent the credit(s) from refunding.

4.4.25.11.1.6  (07-26-2012)
Deficiency/Overassessment

  1. Prompt or quick assessments may sometimes involve a deficiency for one tax period and an overassessment for another tax period. See IRM 20.2, Interest, regarding debit and credit interest computations and dates to use for offsetting. In addition, process these situations as follows:

    1. For the overassessment tax period(s), manually compute the interest and enter it with the applicable transaction code on the adjustment document along with a Hold Code 2.

    2. Make the appropriate credit transfers on IDRS. If there is a Form 3870 in the case file, make the appropriate credit transfers according to the form.

    3. Enter the following caption on Form 2859 to alert the accounting branch of the available credit: "Credit of $ (amount) being transferred from (period)." Attach the Form 2859 to the deficiency year and forward to the accounting branch.

    4. Forward the overassessment document for processing.

4.4.25.11.1.7  (07-26-2012)
Delinquent Return Quick Assessment

  1. When the quick assessment is for tax shown on a secured delinquent return (for example agreed/unpaid deficiency over $100,000), process the return the same as for a deficiency, except for the following:

    1. CCP will enter the tax shown on the delinquent return in Part C, Item 3a (Tax-Original Return-TC 150) on Form 2859.

    2. CCP will enter the return received date in Part C, Item 3b (Return Received Date) on Form 2859

  2. Do not forward the secured delinquent return to the campus for processing.

4.4.25.12  (07-26-2012)
Forwarding Quick Assessments to the Campus, CCP Responsibility

  1. Fax or scan quick assessments to the campus accounting branch using the following procedures.

    1. Assign a control number for each Form 2859 that is faxed, i.e., FAX 49–055–1. The 1st and 2nd digits are the processing campus code; the 3rd, 4th and 5th digits are the Julian date that the Form 2859 is actually faxed; the last digit(s) is the number of the Form 2859. The control number will continue sequentially throughout the calendar year and will start over each January 1st. The control number should be entered in bold print on the top of each Form 2859.

  2. Prepare Form 3210 for each type of tax return. List the following:

    • Name Control

    • MFT

    • TIN

    • Tax Period

    • In the remarks area, enter the 23C date and the note "FAX QUICK ASSESSMENT."

  3. Address Form 3210 to the appropriate function. If you are faxing the request, include the originator's complete address, mail stop, and FAX number in the "From" section for faxing back the receipted Form 3210.

  4. Fax the assessment forms in the following order with a cover sheet:

    1. Form 3210

    2. Form 2859

4.4.25.13  (07-26-2012)
Follow-up on Quick Assessment Form 3210, CCP or Campus Examination Procedures

  1. Receipt of the acknowledged Form 3210 is verification that the quick assessment request(s) was received in the accounting function. Follow-up if the acknowledgment is not received by noon the day after transmission.

4.4.25.14  (07-26-2012)
Quick Assessment Verification Form 3552, CCP or Campus Examination Procedures

  1. Receipt of a copy of Form 3552, Prompt Assessment Billing Assembly, is verification the assessment has been made.

  2. Upon receipt, verify the accuracy of the assessment amount, as well as the name, address, TIN, and tax period on Form 3552 for consistency with Form 2859.

  3. If any errors are detected on Form 3552, IMMEDIATELY contact the campus accounting function for issuance of a corrected bill.

4.4.25.14.1  (07-26-2012)
Follow-up on Form 3552

  1. A manager or designated employee must follow-up with the campus if verification of the assessment is not received.

    1. Follow-up on statute cases in sufficient time to prevent barred assessments.

    2. Follow-up on non-statute cases three weeks from the 23C assessment date.

    Note:

    All follow-up actions should be documented on Form 2859.

  2. Upon receipt of verification, the statute control examiner will be notified in order to close the case from the open statute control file.

4.4.25.15  (07-26-2012)
Second Adjustment Document, Form 5344 or Form 5403, CCP Responsibility

  1. When a return is ready to be closed on AIMS after a quick assessment, input the second adjustment document Form 5344 or Form 5403, Appeals Closing Record, at the same time the quick assessment has been sent to accounting unless one of the following conditions exist:

    1. A credit transfer is being made and will post to the module after accounting has transferred the quick assessment to the MF account.

    2. A payment has been processed but has not posted to MF.

    3. The quick assessment involves interest bearing penalties/restricted interest.

  2. Prepare the second adjustment document as described in IRM 4.4.25.15.1 and process it through the terminal to generate a refile DLN.

    Note:

    Attach a copy of Form 2859 to the front of the first page of the return as a permanent record before closing on AIMS.

4.4.25.15.1  (07-26-2012)
Form 5344 or Form 5403 Entries

  1. Verify the group entry in Item 35, Manual Assessment Amount, or enter the manual assessment amount if it is blank, the net tax adjusted by prepayment credits that was processed using quick assessment procedures. This step applies for quick assessments done on Non-Master File (NMF) returns also.

  2. Enter the applicable disposal code in Item 13.

  3. Enter applicable reference numbers in Item 15.

  4. Following is a table to determine the correct Item 12 and/or 15 entries on Form 5344 or Form 5403:

    Determining the Correct Entries for Form 5344 or Form 5403
    Item 12 and/or 15 Entries Entry Codes
    IF the sum of the
    adjustments, in Item
    12 and/or 15, is a
    THEN enter:
    net increase
    1. TC 300 with zero amount in Item 12.

    2. If there is a credit balance on MF, enter hold Code 2 in Item 7.

    net increase AND there is a decrease in tax
    1. TC 301 with the decrease amount and TC 770 with zero in Item 12.

    2. Hold Code 1 in Item 7, or Hold Code 2 if there is a credit balance on MF.

    net decrease
    1. If the tax liability is to be decreased, enter TC 301 and amount in Item 12. Otherwise, enter TC 300 with zero amount. If TC 300 with zero amount is entered and there is a credit balance on master file, enter Hold Code 2 in Item 7.

    2. If penalty or interest is to be decreased, enter and code the amount in Item 12.

    3. If credit is to be increased, enter the amount and appropriate credit change reference number in Item 15.

    4. Hold Code 1 in Item 7.

4.4.25.15.2  (02-08-1999)
Processing Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return

  1. When adjustments to Form 940 are processed as a quick assessment, the accounting function must ALWAYS be provided with the amount of the TOTAL CORRECTED 940 WAGES.

  2. If a credit reduction state is involved, the accounting function must also be provided:

    1. The credit reduction wages.

    2. The state(s) the credit reduction wage applies to, and

    3. The total credit reduction amount.

4.4.25.15.2.1  (07-26-2012)
Form 2859, Part D Entries

  1. The following items will be entered on Form 2859, Part D:

    1. Enter in Item 21, the total corrected 940 wages.

    2. Enter in Item 22, the total credit reduction amount.

    3. Enter in Item 23a the two digit state abbreviation and in Item 23b the amount of credit reduction wages paid to each state. The total of the credit reduction wages entered in Item 23a must also be provided to the accounting function.


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