4.15.7  Planning and Special Programs Procedures

Manual Transmittal

January 17, 2012

Purpose

(1) This transmits revised IRM 4.15.7, Jeopardy/Termination Assessments, Planning and Special Programs Procedures.

Background

This IRM provides examiners with information and guidance for jeopardy/termination assessments.

Material Changes

(1) Minor editorial changes have been made throughout this IRM. Legal references, form and letter references, and IRM references were reviewed and updated as necessary.

(2) Other significant changes are reflected in the table below.

Reference Description
IRM 4.15.7.4 Updated revised form.
IRM 4.15.7.5(3) Clarified subsection at the advice of Counsel.

Effect on Other Documents

This material supersedes IRM 4.15.7, dated August 16, 2001.

Audience

SB/SE Compliance Employees

Effective Date

(01-17-2012)

Signed by
Tamera L. Ripperda
Director, Abusive Transactions - Technical Issues (ATTI)

4.15.7.1  (01-17-2012)
Overview

  1. This IRM establishes procedures for the control of termination assessment cases.

  2. The Planning and Special Programs (PSP) Manager will assign a Termination Coordinator (TC) to control termination assessment cases.

4.15.7.2  (01-17-2012)
Termination Coordinator

  1. The TC will be responsible for the following:

    1. Receiving the termination assessment file from the examiner who prepared the termination assessment.

    2. Requisitioning the full year return;

    3. Determining if the taxpayer filed a full year return;

    4. Requesting the necessary information concerning the taxpayer; and

    5. Forwarding the termination follow-up file to the Examination Jeopardy Coordinator.

4.15.7.3  (01-17-2012)
Receiving the Termination Assessment File

  1. After a termination assessment has been approved and assessed, the examiner responsible for preparing and processing the termination assessment should forward the termination assessment file to PSP Support. The TC should review the assessment file and place the file in a suspense area for subsequent action.

4.15.7.4  (01-17-2012)
Requisitioning Full-Year Return

  1. Included in the termination assessment file received in IRM 4.15.7.3 should be a Form 5345–D, Examination Request - ERCS (Examination Returns Control System) Users. The TC will complete Form 5345–D and process the form to requisition the full-year return for follow-up action.

4.15.7.5  (01-17-2012)
Determining If Full-Year Return Filed

  1. A taxpayer, other than a corporate taxpayer, subject to a termination assessment is directed to file his/her full year return with the IRS office in which the taxpayer resides or in which the taxpayer's legal residence or principal place of business or, if so instructed, to the IRS office designated to receive returns provided for in the instructions for the particular form being filed. The taxpayer is to attach a copy of the Notice of Termination Assessment to the return.

  2. Returns hand carried or mailed to area offices should be sorted daily to spot those filed with the copy of the Notice of Termination Assessment. These returns should be forwarded to PSP, not to the campus.

  3. A notice of deficiency is required to be mailed by the Service to the taxpayer, within 60 days after the later of:

    1. The due date of the return for the taxable year, determined with regard to extensions, or

    2. The date the taxpayer filed a return for the taxable year if the taxpayer field a return by the due date determined with regard to extensions or within 60 days after the due date of the return whether or not an extension was allowed.

      Note:

      If the taxpayer does not file a return, the notice of deficiency must be sent within 60 days after the due date of the return, including extensions. See Perlowin v. Sassi, 711 F.2d 910, 912 (9th Cir. 1983) and Raminez v. Commissioner, 87 T.C.643, 848 n.2 (1986).

  4. The Termination Coordinator will set up procedures to systematically search filing records to determine if the taxpayer filed the full-year return as required. The search should be made weekly, for a 60 day period, after the due date of the return for the taxable year. If the return is not filed on or before the due date of the return, the TC will forward the termination follow-up file to the coordinator. The TC will continue to monitor filing records weekly, for the 60 day period, to determine if the taxpayer filed a return.

4.15.7.6  (01-17-2012)
Requesting the Necessary Information

  1. The full-year return, if filed, should be forwarded to PSP after requisition by Form 5345–D. If Form 5345-D was not processed and the return was filed, the return will be requested by the TC. If the return was not filed, but a request for extension of time to file returns was filed by the taxpayer, the request for extension will be requested by the TC. All requests should be included in the termination follow-up file. Any other taxpayer correspondence received from the taxpayer or information filed by the taxpayer should be requested and placed in the termination follow-up file.

4.15.7.7  (01-17-2012)
Forwarding the Termination Follow-Up File

  1. The termination follow-up file will be forwarded to the Technical Coordinator.

  2. No Return Filed — If no return is filed by the due date, including extensions, the termination follow-up file must be forwarded immediately to the Technical Coordinator, in order for a notice of deficiency to be issued within 60 days of the due date, including extensions. An examination of the taxpayer for the full year, preparation of the notice of deficiency, and review of the notice of deficiency by Area Counsel must be completed within the 60 day period.

  3. Return Filed — If a return is filed on or before the due date, the termination follow-up file must be forwarded immediately to the Technical Coordinator, in order for a notice of deficiency to be issued within the 60 days of the due date. An examination of the taxpayer for the full year, preparation of the notice of deficiency, and review of the notice of deficiency by Area Counsel must be completed within the 60 day period.

  4. If a return is filed after the due date, whether or not an extension was allowed, the termination follow-up file must be forwarded immediately to the Technical Coordinator. The 60 day period runs from the date the return was received by the Service.

  5. The termination follow-up file will consist of the following:

    1. The termination assessment file received after the termination assessment has been made;

    2. The tax return filed by the taxpayer (If the taxpayer did not file a tax return, a note indicating that a return was not filed will be placed in the file); and

    3. Any other information received concerning the taxpayer.


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