4.11.29  Transfer of Returns Open for Examination

4.11.29.1  (09-10-2010)
References

  1. The references are:

    • Treas. Reg. 301.7605-1 - Time and Place of Examination

    • Treas. Reg. 301.7605-1(e) - Requests By Taxpayers to Change Place of Examination

    • IRM 4.4.33 - Transfers

    • IRM 4.1.4.3.18 - Transfer of Returns (PSP)

    • IRM 4.10.2.8.3 - Transfers of Returns Prior to the Initial Appointment

    • IRM 4.19.13.14 - Transfers to Area Office Examination or Appeals Office

4.11.29.2  (04-01-2005)
Overview for Transfer of Returns Open for Exam

  1. Generally, the examination of any income tax return is the responsibility of the area office in which the taxpayer resides, conducts its business or maintains its principal office. The examination will be assigned to an examiner at the post-of-duty nearest to the taxpayer's residence or place of business.

  2. It may become necessary to transfer a return to an office within the area or to another area office after the examination has begun. The convenience of the taxpayer will be balanced with the requirements of sound and efficient tax administration in honoring a request for transfer.

  3. Generally, the place where the records of the taxpayer are located, where the principal investigative work will be performed, or where the major tax issues can most conveniently be disposed of, will control the decision as to where the examination will be conducted.

  4. See IRM 4.19.13.14 - Transfers to Area Office Examination or Appeals Office, regarding transfers from Campus.

4.11.29.3  (04-01-2005)
Examiner's Responsibility

  1. It is the examiner's responsibility to:

    1. Determine if the request for transfer is allowable, and

    2. Prepare the case file for transfer.

4.11.29.4  (04-01-2005)
Circumstances Which Permit A Transfer Of Examination

  1. Treas. Reg. 301.7605-1(e)(2)(i) provides that a request by a taxpayer to transfer the place of examination for an office examination will generally be granted under the following circumstances:

    1. If the current residence of the taxpayer, in the case of an individual or sole proprietorship, or the location where the taxpayer's books, records, and source documents are maintained, in the case of a taxpayer entity, is closer to a different IRS office in the same area as the office where the examination has been scheduled, the IRS normally will agree to transfer the examination to the closer office.

    2. If the current residence of a taxpayer, in the case of an individual or sole proprietorship, or the location where a taxpayer entity's books, records, and source documents are maintained, is in an Area other than the Area where the examination has been scheduled, the IRS normally will agree to transfer the examination to the closest office in the other area.

  2. Treas. Reg. 301.7605-1(e)(2)(ii) states that a request by a taxpayer to transfer the place of examination for field examinations will generally be granted under the following circumstances:

    1. If a taxpayer does not reside at the residence where an examination has been scheduled, the Service will agree to transfer the examination to the taxpayer's current residence.

    2. If the taxpayer's books, records, and source documents of an individual sole proprietorship (Schedule C), or a business (Form 1120, Form 1065, etc.) return are maintained at a location other than the location where the examination has been scheduled, the Service will agree to transfer the examination to the location where the taxpayer's books and records are maintained. See IRM 4.10.2.8.3.

4.11.29.5  (09-10-2010)
Factors Which Must Be Considered In Assessing A Taxpayer's Request

  1. Examiners should evaluate the facts as to whether the case should be transferred on a case-by-case basis. IRM 4.10.2.8.3 and Treas. Reg. 301.7605-1(e)(1) list the factors that must be taken into account in determining if the taxpayer's examination may be transferred to another area office or POD.

4.11.29.6  (09-10-2010)
The Representative's Request For Transfer

  1. Treas. Reg. 301.7605-1(e) provides that the examiner will consider WRITTEN requests by representatives to change the place the Service has set for an examination. For case transfer purposes, "representative " means attorneys, certified public accountants, enrolled agents, officers of the taxpayer's organization, full-time employees of the taxpayer, or enrolled actuaries that the taxpayer has properly designated as their representative such as by executing Form 2848, Power of Attorney and Declaration of Representative. A " representative" also includes an unenrolled tax return preparer who prepared the taxpayer's return for the year at issue if the taxpayer has designated the unenrolled tax return preparer as their representative (e.g., by executing a Form 2848).

  2. The location of the place of business of a taxpayer's representative will generally NOT be considered in determining the place for an examination. However, if the factors outlined in Treas. Reg. 301.7605-1(e)(2) or IRM 4.10.2.8.3(4) are met, the examiner has the discretion to transfer the place of examination to the representative's office.

  3. The representative must indicate he/she is in possession of the records to be examined and will make them available in an expedient manner. Transfers will not be approved for requests from individuals authorized to receive tax return information through the use of Form 8821, Tax Information Authorization, requests.

4.11.29.7  (04-01-2005)
Written Requests By The Taxpayer/Representative

  1. The request for transfer of a field examination will be considered only after the taxpayer or representative submits the written statement including the following:

    1. The reason for the transfer;

    2. The taxpayer's current address and current phone number;

    3. The address/location of the taxpayer's current principal place of business;

    4. The address/location at which the taxpayer's books, records, and source documents are maintained;

    5. Sufficient information to establish that the transfer will result in an examination where the books, records, and source documents are maintained;

    6. Why the requested location is more efficient for the examination of the taxpayer;

    7. Other factors which indicate that conducting the examination at a particular location could pose undue inconvenience to the taxpayer.

4.11.29.8  (09-10-2010)
Requirements For A Case To Be Transferred Out Of Area

  1. In addition to a written request by the taxpayer or representative (as specified above), the following requirements must be present:

    1. There must be resources available at the location to which the taxpayer has requested a transfer.

    2. At the time of the taxpayer's request to transfer the return from one area office to another there must be at least 13 months remaining on the statute of limitations on assessment.

    3. Consistent with Treas. Reg. 301.7605-1(e)(4), an extension of the statute of limitations will be required as a condition for an otherwise permissible transfer if the 13 month period is not met.

    4. If the taxpayer requests transfer of a 90-day letter case to another area office, the area office that issued the 90-day letter will consult with the potential receiving area office when determining if the case should be transferred. See IRM 4.8.9.17.4.4, Taxpayer Requests Transfer of 90-Day Letter Case.

4.11.29.9  (09-10-2010)
Transfer Initiated By The Service

  1. An examiner may initiate a transfer of an examination if the transfer would promote the effective and efficient conduct of the examination. If the taxpayer requests that a transfer not be made, the examiner will consider the request according to the "Factors that Must be Considered" outlined in IRM 4.10.2.8.3.

4.11.29.10  (04-01-2005)
Area Processing Guidelines

  1. Transfer cases generally need immediate attention. Good customer relations dictate getting the return and the data base to the correct location as soon as possible.

4.11.29.10.1  (04-01-2005)
Submit Case For Transfer As Soon As The Request Is Received

  1. When a transfer request is received from the taxpayer/representative, the examiner will determine if the request is allowable, and if so, immediately prepare the case for transfer. Cases will be transferred within 30 days from the date the request is granted. The receiving area office will accept or reject the transfer within 30 days of receipt.

4.11.29.10.2  (09-10-2010)
Prepare Form 3185, Transfer of Return

  1. Form 3185, Transfer of Return, will be prepared by the group initiating the transfer and will be attached to the outside of the case folder whenever the area office code or industry for LB&I, Large Business & International, will change (Primary Business Code (PBC) changes). Ensure all information is shown on the transfer form, including a legible signature of the responsible employee, current telephone number, and address. The comments section of the Form 3185 will indicate which factor was considered for the transfer. Document the date of taxpayer's request and the statute expiration date in the remarks section or in Item 6.

  2. Transfers of returns outside the PBC are to be sent by the group initiating the transfer to the designated transferring-out personnel for sending to the receiving (transferring-in) personnel. When the group initiating the transfer sends the case file to the transferring-out personnel, the case file must be transmitted with a Form 3210 in addition to the Form 3185. Check the AIMS web site for the current transfer chart by state which is located at http://wsep.ds.irsnet.gov/sites/co/dcse/sbse/exam/webdocuments/Document%20Library/1/AIMS/Contact%20List.xls.

  3. For transfers between groups within the same PBC, a Form 3185 is not required but contact must be made by the transferring group with the receiving group to reach agreement as to the transfer prior to the transfer of the case file. If agreement to the transfer cannot be reached by the group managers involved, the Territory Manager(s) will resolve the propriety of the transfer. Also see IRM 4.11.29.11, Transferring Office Examination Cases to the Field. Form 3210 is to be completed by the transferring group and must identify the taxpayer’s name, SSN/EIN, tax period, to whom it is being sent, date sent, and transmittal code. Indicate in the comment section "Transfer Request see Form 9984, Examining Officer's Activity Record."

    Note:

    The responsibility for preparation and tracking of returns rests with managers and employees as outlined in IRM 1.4.40.4.2.6, Shipment of Returns.

  4. Document the reason for the transfer on Form 9984 (provide supporting workpapers, if applicable) and provide contact information for the IRS employee initiating the transfer on the taxpayer's behalf. The table below provides some reasons and the information to be entered on the Form 3185.

    IF the transfer is a result of: THEN the examiner must provide the reason for the change and:
    A change in address to your area. The new address.
    Legal representative resides or has place of business in your area and taxpayer's books and records are maintained in your area. A contact name, telephone number and address for the legal representative.
    Principal place of business is in your area. A contact name, telephone number and address for the place of business in the receiving area.
    Taxpayer's books and records maintained in your area. A contact name, telephone number and address.
    Bulk of decedent's property in your area. A contact name, telephone number and the address of the decedent's property in the receiving area.

  5. The electronic file, (RGS/CEAS) on the taxpayer, should also be transferred. The current examiner moves the case to the file server (suspend), the manager or secretary must then archive the case or forward it to PSP, depending on local procedures. The receiving area office will retrieve the case from archives and assign it when appropriate.

  6. In addition to the procedures in this IRM, the group secretary must take the steps outlined in IRM 4.4.33.4.1, Transfers Between Area Offices (including PBC 315) or Between Industry and Area Office, when transferring out a return.

4.11.29.10.3  (09-10-2010)
Prepare Form 3198, Special Handling Notice for Examination Case Processing

  1. Check the "name/address change" box and insert the corrected address and phone number for the taxpayer, if applicable. Also, complete Form 2363, Master File Entity Change, (see IRM 4.10.2.7.2(2) through (6), Locating the Taxpayer) if applicable, to reflect a permanent address change and mail or fax to Exam Centralized Case Processing.

  2. Check the "other" box:

    1. Notate "send Letter 1020." (Letter 1020, Correspondence and Interview Examination, will notify taxpayers that the transfer is in progress and to anticipate contact from the receiving office for an appointment)

    2. Notate "route to Planning and Special Programs (PSP) for review prior to transfer."

    3. LB&I Group Managers must contact their industry PSP Analyst who will facilitate the transfer of the return to another group within the same Industry (PBC). If transfer is to a group in a different Industry (PBC), the PSP Analyst will coordinate with their counterpart in the receiving industry (PBC).

    4. Indicate if the file contains a document properly designating a representative (e.g. Form 2848), Power of Attorney and Declaration of Representative.

    5. Indicate if Form 2363, Master File Entity Change, is enclosed in the case file.

  3. Check the "Special Instructions" box and indicate that the examination is being transferred and to see Form 3185, Transfer of Return.

4.11.29.10.4  (04-01-2005)
The Case File Should Include

  1. The letter from the taxpayer/representative requesting the transfer. The letter should be on top of all other papers in the case file.

  2. If the case is transferred after examination has begun, but prior to issuance of the preliminary 30-day letter, the case file should include up-to-date workpapers that set forth all facts, conclusions reached, and tentative adjustments.

  3. If the case is transferred after issuance of the 30-day letter, it should be accompanied by the complete file, any taxpayer protest, and all pertinent papers.

  4. If the taxpayer has requested a hearing with Appeals, the complete file should be forwarded to the Appeals office serving the area office in which the protest was received. The local Appeals office will transfer the case to the receiving Area Appeals office.

    Note:

    A Form 2848 designating an unenrolled return preparer as a representative does not authorize the designated individual to represent the taxpayer in front of Appeals. Taxpayers with such Form 2848 should be advised to submit a new Form 2848 designating another authorized representative.

4.11.29.10.5  (04-01-2005)
Close The Case Through The Group Manager To PSP

  1. The group manager must approve Form 3185. After approval, the group clerk will close on ERCS to status 57, Case Processing, with disposal code 30 and flag the case to be routed to PSP for review.

4.11.29.10.6  (04-01-2005)
The Receiving Area

  1. The receiving area office will contact the taxpayer within 30 days of receipt. When a Form 2848 or other designation of representative is in the case file, the representative is notified at the same time.

  2. If it is determined after the taxpayer is contacted, that the books and records and other source documents needed to complete the examination are not available in the receiving area office, the case should be referred to the group manager for resolution. See IRM 4.10.2.8.3(8).

4.11.29.11  (09-10-2010)
Transferring Office Examination Cases to Field Examination

  1. When it is determined that an office examination case requires a field examination, the group manager will proceed as follows for cases transferred to a field examination group within the same area office:

  2. The office examination group manager will discuss the facts and circumstances of the case with a field group manager in the POD where the case would normally be assigned to determine if they can reach agreement on a transfer.

  3. If the office group manager and the field group manager cannot reach agreement on the reassignment of the case, the office group manager will discuss the facts and circumstances of the case with their territory manager.

  4. If the territory manager concurs with the decision to transfer the case to a field examination group,

    1. The territory manager will assign the case to a group within their territory, or

    2. Discuss the case with the appropriate field territory manager who has field groups in or near the POD that would normally be assigned the case.

  5. Once a determination is made as to the field examination group the case will be transferred to, the office examination group will transfer the case on ERCS and transmit the return using Form 3210.


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