4.19.13  General Case Development and Resolution (Cont. 1)

4.19.13.14 
Transfers to Area Office Examination or Appeals Office

4.19.13.14.2  (01-01-2015)
Transfer to Appeals

  1. Transfers to Appeals Office - Pre-90-day Cases (Non-Docket)

    Note:

    Cases must be received in Appeals with a minimum of 12 months remaining on the statute prior to transferring to an Appeals Office or must have a valid Form 872, Consent to Extend Time to Assess Tax.

  2. If the Statute of Limitations is less than 12 months, then send Letter 907 (SC) and Publication 1035 Extending the Tax Assessment Period, with Form 872, to taxpayer, completed in accordance with IRM 25.6.22, Extension of Assessment Statute of Limitations by Consent, and executed per IRM 1.2.52.3, Delegation Order 25-2 (Rev. 2) (Formerly DO-25-2 and D-42, Rev.28).

    Transfer to Appeals - Pre 90-day Status
    If And Then
    30 Day case and POA or taxpayer requests a transfer to Appeals (one case or multiple cases by same POA) Taxpayer has not provided any documentation Telephone taxpayer. If unable to reach taxpayer by telephone, respond with the applicable letter and the following explanation:" We are in receipt of your request to go to Appeals however, Appeals will not accept cases until after documentation has been submitted for consideration. Since we have not received any documentation from you we need you to supply the following documents for review" , Supply list to the taxpayer. If after you submit documents for review you still disagree with our findings, you can request to go to Appeals. The Publication 3498-A includes instructions on requesting an Appeal. Your request needs to outline what items you disagree with and the reasons why you disagree with our decision.
    Case is a 30 Day case and POA or taxpayer requests a transfer to Appeals (on case or multiple cases by the same POA) Taxpayer has provided documentation but does not identify disagreed issues and supporting position Telephone taxpayer. If unable to reach taxpayer by telephone, respond with the applicable letter. Include in the explanation that in order to transfer his/her case to Appeals the following information is needed:
    1. Written Request to transfer from the taxpayer that includes the changes the taxpayer disagrees with and why.

    2. The facts supporting the taxpayer's position on any disagreed issues, and the law or authority, if any, on which the taxpayer relies.

    3. If deficiency is $25,000 or less, include Form 12203, Request for Appeals Review.

    (See Pub 3498-A, The Examination Process for more information).
    30 Day case and POA or taxpayer requests a transfer to Appeals (one or multiple cases by the same POA) Taxpayer has provided documentation along with a written request to transfer to Appeals that includes:
    1. The changes the taxpayer disagrees with and why.

    2. The facts supporting the taxpayer's position on any disagreed issues, and the law or authority, if any, upon which the taxpayer relies, or taxpayer has submitted completed Form 12203, Request for Appeals Review.

    Refer case to Appeals, Go to Appeals Campus Case Routinghttp://appeals.web.irs.gov to determine where to send the case.

    Note:

    DO NOT release frozen refund on unallowable, EITC and abatement returns.

    Note:

    For Non-Docketed Appeals: Communications between the referring function and Appeals that address the strengths and weaknesses of the issues and positions of the parties, accuracy of the facts, credibility or cooperation of the taxpayer, etcetera, prohibited ex parte communications unless the taxpayer or taxpayer's representative is offered the chance to participate in the communications. However, communications between the referring function and Appeals relating to ministerial, administrative or procedural matters are permissible. Refer to sections 2.02(6) and 2.03(3) of Revenue Procedure 2012–18, Ex Parte Communications Between Appeals and Other Internal Revenue Service Employees, for additional discussion regarding ex parte communications with Appeals.

  3. 90-day Cases

    Transfer to Appeals - Cases in 90-day
    If   Then
    90-day case and POA or taxpayer requests a transfer to Appeals (one case or multiple cases by same POA)   Telephone taxpayer. If unable to reach taxpayer by telephone respond with Letter 555 and include the following explanation: We are in receipt of your request for an Appeals hearing, however, we are unable to honor your request. In order to appeal our decision, you must petition the United States Tax Court. Publication 3498-A, The Examination Process, Audits by Mail, and the Statutory Notice of Deficiency mailed on __________ (insert SNOD date) includes instructions to petition Tax court. However, you may continue to work with us to resolve your tax matter but, we can not extend the time to petition the United States Tax Court beyond________ (insert last day to petition).

    Note:

    When making or receiving phone calls, technicians must follow IRM 21.1.3.2.3, Required Taxpayer Authentication, to ensure they are speaking to the appropriate taxpayer and to prevent unauthorized disclosure of tax information.

    Note:

    Upon transferring a case to Appeals, the original return must be requested. Do not hold case waiting for the original return. Transfer case to Appeals, place a copy of the Form 2275 or ESTAB request in the case file. Upon receipt of the document, Form 2275 or Form 4251 showing current location of document, forward to Appeals. Managerial review and approval must be documented in the workpapers.

4.19.13.14.2.1  (01-01-2015)
Non Docketed Cases Returned from Appeals

  1. An Appeals Officer (AO) will return non-docketed cases to Exam on Form 3210, Document Transmittal, when the taxpayer provides new documentation that was not previously submitted.

  2. The Campus Liaison (CL) will review the new documentation and determine if Correspondence Examination can proceed with the examination.

  3. If the campus cannot work the case:

    1. The liaison will explain the reason the case is being returned

    2. Sign Form 3210 and

    3. Return Form 3210 and the case file to Appeals

  4. If the CL determines the campus can proceed with the examination the CL will:

    1. Sign Form 3210 and return it to Appeals

    2. The CL will have the case updated on AIMS as appropriate and assigned to an examiner to work following normal examination procedures.

4.19.13.15  (01-01-2012)
Docketed Cases

  1. An electronic list of docketed Tax Court cases is posted daily to the Appeals Centralized Database System.

  2. Daily the Kansas City Exam Operation (KCSC) will pull the list and research each docketed Tax Court case. The centralized research eliminates the duplication of researching the same list at all Campuses.

  3. Using a Docket Information Management System (DIMS) Contact Listing the researched list is sent as a secured e-mail to the appropriate Campus Contacts; Primary, Backup, and manager in the other 9 sites.

  4. All Campuses will continue to be responsible for compiling the administrative case files for all cases identified as originating from their Campus/Operation, and forwarding them to the correct Appeals Office.

  5. The Docket Clerks must update CEAS into status (8X) and either Disposal Code 07 or 11 before they ship a case to Appeals. See 4.19.13.15.2, Docketed Case Review, prior to updating the case to Status 8X.

  6. See IRM 4.8.9.25, United States Tax Court Petition Filed, and IRM 4.8.10.15.6, Status 90 Cases, for specific procedures.

    Reminder:

    Priority will be given to researching docketed cases by KCSC. The sites should complete and forward the packages within 10 days of receiving the listing.

4.19.13.15.1  (01-01-2014)
Docketed Cases Status 90

  1. Docketed cases reflecting status 90 with a disposal code 02 are no longer required to be forwarded to Appeals.

  2. Complete Form 14121, No Change Certification. Form 14121 must be faxed to the Assigned Area Counsel Office shown on the docket list (DIMS) AND the Appeals DIMS unit.

    1. Fax numbers for the assigned Area Counsel Office can be located at: http://counsel.web.irs.gov/etools/counsel_irs/pdirectory.asp#directorysearch

      Note:

      When using the CC link, go to the Office report Drop down key and click on the city noted on the DIMS list.

    2. Fax numbers for the Appeals DIMS unit are: (559) 452-3241 or (559) 452-3266 and the e-Fax number is (877) 805-7796.

    Docketed case reflecting status 90 closed with any other disposal code see IRM 4.8.9.25.7, Status 90 Cases, for specific procedures.

4.19.13.15.2  (01-01-2014)
Docketed Case Review

  1. Prior to updating a docketed case to Status 81, the case must be reviewed to ensure all mail has been considered and addressed.

    If And Then
    All mail has been addressed   Follow procedures as outlined in IRM 4.8.9.25, United States Tax Court Petition Filed
    Mail has not been addressed, review mail as an expedite Mail does not change the determination Document workpapers with findings. Update to status 81 and forward to Appeals as outlined in IRM 4.8.9.25, United States Tax Court Petition Filed.
    Mail has not been addressed, review mail as an expedite Mail changes determination and case is a no change Document workpapers with findings. Call TP to inform him/her that documentation was reviewed and case will be no changed.

    Note:

    When making or receiving phone calls, technicians must follow IRM 21.1.3.2.3, Required Taxpayer Authentication, to ensure they are speaking to the appropriate taxpayer and to prevent unauthorized disclosure of tax information.

    Explain to TP that a no change letter will be issued. If unable to contact TP, prepare no change Form 4549 and issue 555 with explanation that return has been accepted as filed based upon documentation received. Notate the information section "This Form 4549 is for your information only." Close case. Complete Form 14121, with applicable signatures and forward to Appeals as outlined in IRM 4.19.13.15.1, Docketed Cases Status 90.
    Mail has not been addressed, review mail as an expedite Mail partially changed determination Document workpapers with findings. Call TP to inform him/her that documentation was reviewed and findings. Prepare a supplement report. Prepare 555L and Form 4549, mail to TP with explanation that case will be forwarded to Appeals. Update case to status 81 and forward to Appeals.

4.19.13.16  (01-01-2008)
Special Handling Notice for Examination Case Processing, Form 3198

  1. Refer to instructions on Form 3198, regarding uses.

    Note:

    Filing Status changes must be annotated on the Form 3198.

  2. When the case is closed by someone other than the tax examiner who worked the case and special processing is required, attach Form 3198 to the outside of the file folder. The only forms not placed under the Form 3198 are:

    • Form 895, Notice of Statute Expiration.

    • Form 2859, Request for Quick or Prompt Assessment.

  3. If a case can be closed using the RGS generated Form 5344, Examination Closing Record, the completion of the Form 3198 will not be required if no additional action is needed by the closing unit.

4.19.13.17  (07-16-2012)
Case File Assembly

  1. Follow procedures outlined in Exhibit 4.4.1–8, Case Assembly, for complete case assembly information for cases not established and worked using ACE Processing.

  2. A copy of Letter 692 and Letter 555 do not need to be kept in the case file, whether it is paper or electronic. It is imperative that all case history sheets (paper or electronic) be annotated to include date of letter and why it was sent, e.g., "Revised report issued/no change to previous determination."

  3. The RGS system maintains an electronic file of information generated through the system for the taxpayer under examination. Therefore, in lieu of establishing a case file for in process selected cases and printing an entire closing case file package, refer to IRM 4.19.13.17.1, RGS Case File Assembly, for cases that have been established and worked in the RGS system.

4.19.13.17.1  (07-16-2012)
RGS Case File Assembly

  1. NO REPLY CASES: If the taxpayer has never responded to any correspondence, no file will be printed (except the Notice of Deficiency) until closing. At that time, the Examination Report Generation Software (RGS) Closing Information Cover Sheet, Form 13181 will be generated. Disposition of Form 13181 is dependent upon the process by which the Statutory Notice of Deficiency (SNOD) was generated (indicated by the blocking series):

    • If the SNOD was generated by the AMSTUS/STN02 program (Blocking Series 40X), Form 13181 should be properly disposed of. No case will be forwarded to files.

    • If the SNOD was generated by the AMSTUS/ST01 program or a manual process (Blocking Series other than 40X), Form 13181 must be completed and forwarded to the local Files Management and Services area for association with the Computer Form (CF) 5147, IDRS Transaction Record. SCA TL-N-5679-99, Campuses Should Make Copy of Notice of Deficiency, states that campuses should print a duplicate of the original Notice of Deficiency at the time the original notice is printed. This duplicate original must be attached to the above referenced cover sheet forwarded to the Files area for association with the Computer Form (CF) 5147. These items will be submitted to the Files function, in folders by input employee number and, in sequence number order within date of input.

  2. REPLY CASES: If the taxpayer has responded to any correspondence, the Examination Report Generation Software (RGS) Closing Information Cover Sheet will be completed. Attach to this cover sheet:

    • Any correspondence received from the taxpayer,

    • Any copies of documents received from the taxpayer,

    • A duplicate of the original Notice of Deficiency as described above if there is no electronic version stored on RGS.

  3. This will constitute a closing package file that should be forwarded to the local Files Management and Services area for association with the Computer Form (CF) 5147, except for NO REPLY cases with Blocking Series 40X as indicated above. These items will be submitted to the Files function, in folders by input employee number and, in sequence number order within date of input.

    Note:

    Case files that are needed at a later date will be requested from and printed by the Compliance Center maintaining the electronic RGS file.

4.19.13.18  (04-04-2013)
Offers in Compromise

  1. Refer to IRM 5.19.7.3, Monitoring Offers in Compromise (MOIC), IRM 5.19.1.6.2, Expenses Overview, and IRM 4.18.1, Offers in Compromise Received in Exam, for additional information.

  2. Under IRC 7122 and Treas. Reg. §301.7122-1, the Service can compromise a liability for less than the full amount owed if:

    • Liabilities cannot be collected in full due to taxpayer’s inability to pay,

    • There is a doubt as to the existence or amount of liability, or

    • Due to exceptional circumstances a compromise would promote effective tax administration.

    However, Campus Examination does not consider an Offer in Compromise.

    Actions to take regarding Form 656
    If Then
    The taxpayer requests a Form 656, Offer in Compromise, Advise the taxpayer that a Form 656 is available for download at www.irs.gov. If they cannot access the Internet, a Form 656 will be mailed.
    Completed Form 656 is received, Forward it to one of the centralized OIC sites – Memphis or Brookhaven – per the instructions in the Form 656 package. Inform the taxpayer by phone or quick note that the form has been forwarded to the Collection Department for consideration.

4.19.13.19  (01-01-2015)
Bankruptcy

  1. If there is an indication that the taxpayer under examination has filed for bankruptcy, the examiner should immediately contact the Examination Bankruptcy Coordinator. The Coordinator will determine if the bankruptcy is still pending and provide further instructions to the examiner.

  2. Indications of bankruptcy include:

    1. -V Freeze on TXMOD

    2. TC 520

    3. X Freeze on AIMS

    4. Taxpayer indicates verbally or through correspondence that he is in bankruptcy

  3. The Examination Bankruptcy Coordinator is to contact the appropriate Insolvency Unit to determine the status of the bankruptcy proceedings and to furnish them with a copy of the Revenue Agent Report if necessary for the proof of claim. The Automated Insolvency System (AIS) and PACER (Public Access to Court Electronic Records) can be used to locate the insolvency office and track the status of the bankruptcy case.

    1. If the case has not been started and a determination has been made to continue with the examination, a Revenue Agent Report should be prepared for purposes of estimating the maximum adjustment for the proof of claim.

  4. For bankruptcy cases filed on or after October 17, 2005, the bankruptcy Statutory Notice of Deficiency (Letter 531 (SC)) is not required for deficiencies related to post-petition taxes incurred by an individual or by the bankruptcy estate of an individual in a Chapter 7 or 11 case.

  5. If the taxpayer is in bankruptcy, the examination will continue. The Examiner will issue the 30-day letter and close the case if the taxpayer agrees, or if it is determined that the taxpayer has substantiated all issues the case can be closed no-change.

  6. If the taxpayer is in bankruptcy and disagrees with the proposed examination changes included in the 30-day letter, the case must be transferred to the Bankruptcy EGC 5033.

    1. The Bankruptcy Coordinator will have the Bankruptcy Statutory Notice of Deficiency, Letter 531, with Notice 1421, How Bankruptcy Affects Your Right to File a Petition in Tax Court in Response to a Notice of Deficiency, prepared and sent to the taxpayer instead of the 90-day letter Statutory Notice of Deficiency.

    2. In the case of joint returns where only one of the spouses has filed for bankruptcy, the Bankruptcy Coordinator will ensure that the non-petitioning spouse is issued a 90-day Statutory Notice of Deficiency and that the assessment is made on the IMF Master File MFT 31 (in accordance with IRM 21.6.8, Split Spousal Assessments (MFT 31)), when the 90-day period expires.

    Note:

    If a MFT 31 needs to be established, the bankruptcy coordinator must contact CIO via e-mail at cioissues@irs.gov, at least 12 weeks prior to the expiration of the 90-Day Statutory Notice of Deficiency.

  7. If a taxpayer was issued a Statutory Notice of Deficiency within 90 days before the taxpayer files a bankruptcy petition, or the taxpayer files a bankruptcy petition before the taxpayer is issued a Statutory Notice of Deficiency, the case cannot be defaulted (closed) while the bankruptcy automatic stay prohibits the taxpayer from petitioning the Tax Court, plus an additional 60 days after the stay ends. The case must be transferred to the control of the Bankruptcy Coordinator by updating the Employee Group Code (EGC) to 5033.

    Caution:

    For bankruptcy cases filed on or after October 17, 2005, the automatic stay may go into effect for only 30 days, or may not go into effect at all, if the taxpayer was an individual in a prior bankruptcy case that was pending within the preceding one year period. See 11 U.S.C.362 (c)(3) and (4). The stay may also not go into effect if the taxpayer was a debtor in a small business bankruptcy case within the preceding two year period. See 11 U.S.C. 362(n). Contact Counsel to determine the extent of the stay in these situations.

    1. In the case of joint returns where only one of the spouses has filed for bankruptcy, the Bankruptcy Coordinator will ensure that the assessment is made on the IMF Master File MFT 31 (in accordance with IRM 21.6.8, Split Spousal Assessments (MFT 31)), for the non-petitioning spouse when the 90-day period expires.

    2. The Bankruptcy Coordinator will issue the Bankruptcy Statutory Notice of Deficiency (Letter 531 with Notice 1421) to the taxpayer that filed bankruptcy in order to put him on notice of the suspension of the 90-day period and his options concerning the Tax Court and the Bankruptcy Court.

  8. For bankruptcies filed on or after October 22, 1994, the procedure in (7) above does not apply if the bankruptcy petition was filed after the expiration of the 90-day period. In this situation, the assessment can be processed any time after the expiration of the 90-day period because the bankruptcy automatic stay does not prohibit the assessment of tax. See 11 U.S.C. 362(b)(9)(D).

  9. The Bankruptcy Coordinator will hold the case in suspense until the automatic stay terminates due to one of the following: the bankruptcy is closed or dismissed, the debtor is granted or denied a discharge, or the stay is lifted by order of the Bankruptcy Court. The case will remain in Status 24 while the bankruptcy stay is in effect because the Statutory Notice is being used to suspend the statute.

    1. If the bankruptcy case is dismissed, the Coordinator should contact the Insolvency Unit to determine if the case should be closed.

  10. The bankruptcy case does not suspend or extend the ASED (Assessment Statute Expiration Date) during the examination case. The ASED must be protected by either issuing a Statutory Notice of Deficiency or securing a Form 872, Consent to Extend the Time to Assess Tax, or Form 872-A, Special Consent to Extend the Time to Assess Tax. If the Statutory Notice is issued, AIMS can be updated to Alpha Code KK. However, the statute should not be updated to KK until 120 days remain on the normal statute.

  11. The ASED is suspended in a bankruptcy case if the Statutory Notice of Deficiency was issued within 90 days before the filing of the bankruptcy petition or on or after the filing date as explained in Paragraph (7) above. Upon the termination of the automatic stay, a new ASED must be calculated. The new ASED is calculated by adding the following to the original ASED:

    1. The number of days the taxpayer was prohibited by the automatic stay from commencing a Tax Court case, plus

    2. 60 days as provided by IRC 6213(f), plus

    3. 90 days as provided by IRC 6213(a), plus

    4. 60 days as provided by IRC 6503(a).

    See Rev. Rul. 2003–80 for a discussion of the effect of a bankruptcy on the running of the statute of limitations on assessment.

    Note:

    IRC Section 6213(a) provides that the period to file a petition to Tax Court is 150 days if the notice is addressed to a person outside the United States.

4.19.13.20  (01-01-2015)
Combat Zone

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  3. The Combat Zone -C freeze and indicators are located on CC IMFOLE, Line 11. Combat Zone indicators are: "0" = Not a Combat Zone participant; "1" = Active and "2" = Inactive. Conflict indicator codes identify the combat zones(s) where the taxpayer served, See IRM 2.3.5-13, Command Code IMFOL Output Display - Entity, for a breakdown of the conflict codes.

  4. The combat zone -C freeze code is an entity freeze code that remains on the account for historical purposes, even with input of accurate entry and exit dates. The "-C" freeze can be set by a Transaction Code (TC) 500 in the following ways:

    1. Department of Defense (DoD) - A monthly systemic download places a TC 500 with an entry or exit date.

    2. Processing of an original or amended tax return where the taxpayer self-identifies by writing "Serving in Desert Storm/Shield, Bosnia, former Yugoslavia, Allied Force, Afghanistan, Enduring Freedom or Haiti/Operation Unified Response"

    3. Manual input of TC 500

  5. If the cases are unstarted and in AIMS Status 09 or below, survey them with AIMS Disposal Code 31.

  6. If the case are started and in AIMS Status 10 or above, survey with AIMS Disposal Code 32 and send closing Letter 1024, Return Accepted as Filed, or Letter 4392, Combat Zone Examination Closed, for non-filers.

  7. If there is a frozen refund on the account, the TC 421 will release refunds on most accounts. Accounts should be monitored for release of credits. If the credits do not release, it will be necessary to input a TC 290.00.

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    1. Input TC 500 with Closing Code 56 (the Closing Code for Afghanistan or Enduring Freedom and the current conflict in IRAQ are the same) to reflect when the taxpayer entered the Combat Zone. If no entry date was provided, do not input TC 500.

    2. If the taxpayer has exited the Combat Zone, input a TC 500 with Closing Code 57 and the exit date.

    3. For joint accounts, if an "S" appears in the CSED field following the Closing Code (CC: 56 CSED: S), this means that the spouse is in the Combat Zone. If updating the Combat Zone indicator, you must enter an "S" in the CSED field so the action is applied to the spouse, not the primary taxpayer.

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4.19.13.21  (01-01-2015)
Information Referrals - Form 3949-A

  1. Refer to IRM 25.2, Information and Informants' Rewards, for information on rewards for informant claims.

    Note:

    Employees are referred to the entire section and not just Parts 1 and 2.

  2. Information reporting alleged tax law violations is received via telephone calls, office visits (walk-ins) and correspondence. The information provided is documented and forwarded to the responsible function for the appropriate action.

  3. Informant claims for rewards submitted on Form 211, Application for Award for Original Information, must be forwarded to the Whistleblower Office at:
    Internal Revenue Service
    Whistleblower Office
    SE:WO
    1111 Constitution Ave., NW
    Washington, DC 20224

4.19.13.22  (01-01-2015)
Innocent Spouse Relief/Joint and Several Liability

  1. If during an on going correspondence examination you receive a Form 8857, Request for Innocent Spouse Relief, from the taxpayer then:

    1. Suspend activity on the case.

    2. Contact your Examination Branch’s primary or back-up Innocent Spouse Coordinator for advice.

    3. Follow this Coordinator’s advice on how to proceed with your examination, along with closing procedures.

  2. Each Examination Branch will have an Innocent Spouse primary and back up Coordinator.

  3. The primary or back up Innocent Spouse Coordinator will be responsible for:

    • Date stamping the Form 8857, Request for Innocent Spouse Relief

    • Faxing the Form 8857 and any correspondence regarding Form 8857 within ten business days to Cincinnati Centralized Innocent Spouse Operations (CCISO) at (855) 233-8558, Attn: Innocent Spouse AUR/SCEB Coordinator.

      Note:

      If too large to fax, mail within ten business days, using internal mail, to:
      Cincinnati Submission Processing Center (CSPC)
      201 W. Rivercenter Blvd. Stop 840-F
      Covington, KY. 41012

    • Coordinating with CCISO on making the Innocent Spouse determination and incorporating the determination made by CCISO along with the statutory notice, if not previously issued.

    • Making taxpayer account adjustments based on instructions from CCISO.

    Note:

    Forward any Innocent Spouse documents/correspondence ran through the Correspondence Imaging System (CIS) immediately to CCISO.

  4. If Form 8857 is received on a closed correspondence examination and not open in any other function, then the case should be routed to CCISO within ten business days.

  5. See IRM 25.15.7.3, Automated Underreporter (AUR) or Compliance Campus Examination Operations (CCEO) Cases - Overview, for more information.

    Note:

    Innocent Spouse Coordinators and their back ups should become very familiar with this section.

4.19.13.23  (01-01-2015)
Taxpayer Advocate Service (TAS) Procedures

  1. Taxpayers contact TAS for assistance in resolving problems when they:

    • Have been unsuccessful in resolving them through normal channels,

    • Are experiencing economic harm, or

    • Believe an IRS system or procedure is not working as it should.

  2. The request must meet criteria as listed in IRM 13.1.7.2, TAS Case Criteria. Taxpayers may request assistance during or after the examination. Form 911, Request for Taxpayer Advocate Service Assistance (And Application for Taxpayer Assistance Order), will be prepared by TAS or by the identifying function.

  3. The National Taxpayer Advocate has reached an agreement with the Commissioner of the Wage and Investment (W&I) , Small Business Self Employed (SB/SE), and the Large Business and International (LB&I) Divisions, that outlines the procedures and responsibilities for the processing of TAS casework when either the statutory or delegated authority to complete case transactions rests outside of TAS. This agreement is known as a Service Level Agreement (SLA). These SLAs is located at http://tas.web.irs.gov under the heading "TAS Favorites" .

4.19.13.23.1  (01-01-2012)
Referrals to TAS

  1. Refer taxpayers to TAS (See IRM 13.1, TAS Taxpayer Advocate Case Procedures) when the contact meets TAS criteria (See IRM 13.1.7, Taxpayer Advocate Service (TAS) Case Criteria) and the taxpayer’s issue cannot be resolved the same day. The definition of "same day" is within 24 hours. "Same day" cases include cases that can be completely resolved in 24 hours, as well as, cases in which you have taken steps within 24 hours to begin resolving the taxpayer’s issue. Do not refer "same day" cases to TAS unless the taxpayer asks to be transferred to TAS and the case meets TAS criteria. Refer to IRM 13.1.7.4, Same Day Resolution by Operations. When you refer cases to TAS, use Form 911, Request for Taxpayer Advocate Service Assistance (and Application for Taxpayer Assistance Order), and forward to TAS. For more information on Taxpayer Assistance Order (TAO) refer to IRM 13.1.20, TAS Taxpayer Assistance Order (TAO) Process.

  2. Taxpayers whose situations meet Taxpayer Advocate Service (TAS) criteria 5-7 AND involve identity theft will be considered meeting IPSU criteria, see IRM 21.9.2.9, Identity Theft Assistance Request (ITAR) - General Information. When you refer cases to IPSU, use Form 4442, Inquiry Referral. Follow IRM 4.19.24, Compliance Identity Theft, for Exam procedures for referring Form 4442.

4.19.13.23.2  (01-01-2015)
Referrals from TAS

  1. When a case requires referral to the Examination function, the TAS employee prepares an Operations Assistance Request (OAR), Form 12412. Form 12412 identifies the taxpayer’s issue, specific assistance requested from the Operating Division or Function, TAS case criteria met, and recommendation for resolution. TAS will secure and forward copies of signed amended returns and/or any documentation necessary for the resolution of the OAR.

  2. OARs are mailed to the Exam Unit via a Form 3210, Document Transmittal. To the extent possible, the Form 12412 and attachments will be sent via encrypted e-mail. The Form 12412 and attachments may also be faxed, mailed or hand carried to Exam.

  3. Referrals from TAS will include:

    • Cases controlled on AIMS [Open L-Freeze].

    • Cases previously controlled on AIMS [Audit Reconsiderations].

    • Cases referred from another part of the Service [Accounts Management, AUR, or Collections] for Exam classification. Examples: CAT-A, EITC Form 1040-X, Amended U.S. Individual Income Tax Return, or Source Code 38.

4.19.13.23.3  (01-01-2007)
Responsibilities of the TAS Case Advocate

  1. TAS Case Advocate will:

    1. Contact the taxpayer regarding issue(s) with the examination process such as refund or examination processing delays.

    2. Forward completed OAR Form 12412, Operations Assistance Request (OAR), with supporting documentation to Exam.

    3. Be the main conduit for all taxpayer contact. The TAS Case Advocate will forward any document request from the Examiner to the taxpayer and forward any information received from the taxpayer to the Examiner, unless otherwise specified.

    4. When working prior year over-aged inventory, or securing additional documentation, the TAS Case Advocate may facilitate a conference call with the taxpayer and the Examiner in order to expedite closing the case.

    5. Timely inform the Examiner if the taxpayer does not reply within the time frame agreed upon.

    6. Monitor for the adjustment(s) to post including TC 840 (Manual Refund transaction), after Examination has closed their case.

    7. Ensure Hold Codes are released.

4.19.13.23.4  (01-01-2015)
Responsibilities of the Operational Liaison/Exam Coordinator

  1. Operational Liaison/Exam Coordinator is an Exam technical employee who will review the Form 12412, Operations Assistance Request (OAR), for completeness and correct routing. The OAR must contain:

    1. A written explanation of the request for assistance

    2. A due date for completion

    3. The name, telephone, fax number of the TAS employee making the request

    4. Documentation to resolve the TAS issue

  2. If the Form 12412, Operations Assistance Request (OAR), is incomplete, contact TAS within one (1) workday of the determination, and within one (1) workday of the receipt of the OAR in the case of expedite processing OARs, to obtain information. If TAS cannot provide the information needed for the liaison to assign and work the OAR, within three (3) workdays of the request, return the case to TAS.

  3. If an OAR is routed by TAS to the incorrect office or campus location, the W&I, SB/SE and or EITC Business Unit Liaison will reject and return the OAR to TAS within three (3) workdays of receipt or within one (1) workday where TAS has requested expedite processing. The appropriate Business Unit Liaison will complete Section VI of Form 12412 indicating the reason for the rejection, citing the W&I SLA Addendum, or SB/SE SLA Addendum and IRM references (when applicable). TAS will issue a new OAR with the correct routing information.

  4. If the Form 12412 is complete:

    1. Obtain AMDIS prints, if needed.

    2. Write or attach the AIMS Source Code, Status Code, EGC and Project Code on the top of Form 12412.

  5. If the case is in AIMS Status 00-09, the Operational Liaison or designee will screen the case and resolve if possible. See IRM 4.19.13.23.5, Premature Referral Cases, AIMS Status 00-09, for procedures.

  6. The Operational Liaison will determine which team/function is responsible for resolving the taxpayer issue. For OARs that require expedite processing, the receiving office will assign within one workday to a tax examiner (TE) upon receipt from TAS. All other cases will be assigned within three workdays.

  7. For all cases involving complete OARs, the Operational Liaison, or designee will

    1. Date stamp and record the OAR case information in the Compliance TAS database or TAS Ledger.

    2. Assign the OAR to the appropriate Exam team.

      Assignment Procedures
      If Then
      Currently assigned to an examiner Assign to the AIMS EGC.
      The case is in ACE and not previously assigned to an examiner Assign cases equitably to the units.
      The case is in clerical suspense Secure and refer to the last assigned (examiner) team.
      Audit Reconsideration cases Refer to Centralized Reconsideration Unit (CRU).
    3. Do not place TAS cases in a separate status code.

    4. Open or update IDRS control and notate history item with "911-TAS" .

    5. Attach Form 3198, Special Handling Notice for Examination Case Processing, to the outside of the folder and notate Form 12412, history sheet and place any attachments on the inside.

    6. Acknowledge receipt of the OAR by completing items 1-3 of Section V and entering action date in Section IV.

    7. Within three days of receipt, or within one workday when TAS has requested expedite processing, acknowledge receipt of the OAR and provide the team manager's name and telephone number for assigned OARs. If Form 3210 was received with the OAR, it will be returned by either fax or mail or an automated notification will be generated and sent via email to acknowledge receipt. Acknowledgement of eOARs may be made via email.

  8. For aging consistency purposes, all operations will use calendar days when counting the age of a case.

    Note:

    For reporting purposes – a case greater than 14 calendar days is considered an aged case.

    1. The start of the aging process will occur when the faxed or mailed OAR is received by the operational liaison from the TAS office.

    2. Day one of the process will be:

      Processing Procedures
      If Then
      An OAR is received before 2:30 p.m. in the time zone receiving the OAR It will be considered received that day.
      An OAR is received after 2:30 p.m. It will be considered received the following business day.
    3. End date will be the day the operational area completes IDRS input and records the OAR closing on the Compliance TAS database.

    4. The case age will be calculated by subtracting the Day One date from the End Date.

  9. Any OAR closed "No Relief Granted" will be closed out of the receiving area's inventory and returned to the TAS office. These cases should never be rejected back to TAS. If the taxpayer asks to reopen his case, and sends in new additional information/documentation, the incoming OAR will be opened and treated as a new request/case.

4.19.13.23.5  (01-01-2012)
Premature Referral Cases, AIMS Status 00 – 09

  1. Upon receipt of an OAR case, research/review ACE Action Report or other IDRS prints as necessary for prior year examination closing action.

  2. If the prior year return was closed no-changed and the same information is reflected in the current year, close the case. Refer to IRM 21.4.4, Manual Refunds, if applicable and IRM 4.19.14.6, Recertification, for procedures on removing the recertification indicator.

  3. If the taxpayer was examined and the research indicates that one or more dependents were disallowed in the prior year, review CEAS or obtain copies of workpapers and RAR (Examination Report).

    • Verify the dependent SSN that was allowed from the prior year report and follow appropriate closing action.

    • Verify the dependent SSN that was disallowed from the prior year report. Inform TAS caseworker that a full examination will be conducted and assign case to an Exam team.

    • If a different child(ren) is (are) claimed, inform TAS caseworker that a full examination will be conducted and assign case to an Exam team to prepare the initial contact letter.

    Note:

    For expedited cases, respond to TAS within 1 workday.

4.19.13.23.6  (04-22-2013)
Closing Procedures for Operational Liaison

  1. Operational Liaison will:

    1. Notate in the Compliance TAS database the date the case was closed and what action was taken to close.

    2. If the case was a no reply, notate that the case was returned to normal exam work, and

    3. Fax or generate automated transmission of the completed Form 12412, Operations Assistance Request (OAR), and hand carry or mail the case to the appropriate TAS office.

4.19.13.23.7  (01-01-2007)
Clerical Procedures

  1. The completed folder is given to the clerk for input. Using information found on the Form 12412, Operations Assistance Request (OAR), the clerk will:

    1. Update TAS cases to special EGC, if applicable, as designated by the unit manager, so that the cases can be tracked easily.

    2. File the copies of the Form 12412 and the fax transmittal confirmation in the "OAR" log book.

    3. Prepare a Form 3210, Document Transmittal, if necessary, with the information notated by the Operational Liaison/Exam Coordinator and hand carry to the proper team for assignment to TE.

    4. When the case is closed by TE or by Operational Liaison/Exam Coordinator, the case will be returned to clerk for disposition.

4.19.13.23.8  (01-01-2014)
General Examination Procedures for TE

  1. The TE will:

    1. Review the description of assistance requested by TAS and requested date of completion. The Exam TE and TAS Case Advocate will agree upon the time frames for follow-up based on the facts and circumstances of the particular case.

      Note:

      TAS will notify Exam when a taxpayer meets criteria for expedited processing. The examiner will make all determinations based on facts and circumstances of the case, IRM procedures and application of tax law. TAS will not make a determination on the issues but may recommend specific action(s) be taken. Contact TAS before closing case.

    2. Enter all documentation and information on RGS workpapers, as with any other case. For cases not on RGS, prepare manual workpapers.

    3. Research RGS, IMFOL, TXMOD, AMDIS and other sources as outlined under IRM 4.19.14.5, Evaluating EITC Taxpayer Responses.

    4. Respond within three workdays in writing, fax, or hand delivery to the TAS Case Advocate the relief/no relief decision if the case requires expedite processing

    5. Inform the TAS Case Advocate by the negotiated date of the resolution if the case does not require expedite processing.

  2. The TAS Case Advocate must be kept apprised of action and/or contacts made by the TE with the taxpayer or practitioner. Telephone contact with the TAS advocate will not be conducted using the toll-free telephone number.

  3. TE case evaluation of TAS referral steps:

    Steps for Case Evaluation of TAS Referrals
    If Then Follow
    The case results in Full Examination or a Revised Report can be issued based on the documentation provided
    • For expedite cases, forward an examination report and appropriate letter (30 day, 90-day, Letter 692) to the taxpayer within 3 workdays.

    • For all other cases, time frame as agreed upon by TE and TAS Case Advocate

    • IRM 4.19.14.4, RPS Casework Procedures, and other related sections for working the case.

    • IRM 4.13, for Audit Reconsideration, and

    • IRM 4.19.16, Claims, for CAT-A Claims.

    Additional Documentation is needed
    • Inform TAS in writing that additional documentation is needed to close or resolve the issue.

    • When appropriate, Examiner can request TAS Case worker to call the taxpayer to expedite obtaining the additional documentation.

    IRM 4.19.14.4.1, RPS Examination Process.
  4. Examination Closing of TAS referral steps:

    Steps for Closing Examination of TAS Referral
    If Then Follow
    The case can be closed No Change based on the information researched or documentation received from the taxpayer
    • The examiner will input a Hold Code on the examination closing to prevent erroneous refunds from generating.

    • The examiner will complete Section VI, Parts 1 (a and b) and 2 (a, b, and c) of the Form 12412, Operations Assistance Request, (OAR).

    • IRM 4.19.13.27, Campus Exam Closing Actions, for further procedures.

    • IRM 4.13, for Audit Reconsideration.

    Items questioned are fully or partially disallowed
    • Close case as per IRM guidelines.

    • The examiner will complete Section VI, Parts 1 (a and b) and 2 (a, b, and c) of the Form 12412.

    • IRM 4.19.13.27, Campus Exam Closing Actions, for further procedures.

    • IRM 4.13, for Audit Reconsideration.

  5. After all the closing actions have been completed, including inputting any adjustments:

    1. Close any IDRS controls on the case, note on the history item how case was closed.

    2. Complete items 4-10 of Section V of Form 12412

    3. Give the case along with the Form 12412 to the Operational Liaison.

    Reminder:

    The employee assigned the OAR is to complete Section VI of Form 12412 and return it to the Operational Liaison who will return it to the TAS case advocate assigned the case. The Form 12412 will be returned within three (3) workdays from the date all actions have been completed and transactions input.

4.19.13.24  (02-13-2013)
Disaster Relief

  1. This is the general overview for Campus Examination in event of a federally declared disaster.

  2. Procedures for responding to federally declared disasters or other significant emergencies can be found in IRM 25.16, Disaster Assistance and Emergency Relief.

  3. A complete index of issued Disaster Relief Memorandums, Zip Codes, and suspension periods of enforcement activities for each disaster can be found at the disaster web site: http://www.icce.irs.gov/fema/2012/index.html.

  4. Additional information is also available on the SB/SE Disaster Assistance and Emergency Relief site athttp://mysbse.web.irs.gov/opsupport/cso/stakeholderliaison/disaster/default.aspx.

4.19.13.24.1  (04-04-2013)
Disaster Indicators and IDRS Freeze Codes

  1. The IRS identifies accounts impacted by a declared disaster by zip codes and inputs a TC 971 Action Code. Depending on the type of relief assigned to that zip code area, a master file -S or -O freeze will be generated.

    1. The -S freeze on the account stops interest and penalties for a determined timeframe but does not stop compliance activities or notices.

    2. The -O freeze on the account stops interest and penalties for a determined timeframe, stops compliance activities, and stops most notices.

  2. These freeze codes do not prevent cases from establishing on AIMS.

  3. The Disaster Indicators will post on the entity portion of IDRS, which are defined as follows:

    1. 1 = -S freeze active

    2. 2 = -O freeze active

    3. 3 = both -S and -O freezes are active

    4. 4 = not currently active.

  4. To set the freeze code you will take the following actions:

    1. Use CC ENMOD

    2. Input CC REQ 77

    3. Input TC 971

    4. Transaction date = input disaster start date

    5. Secondary date = input disaster end date

    6. TC 971 / 151 CD = input 087 for -O freeze

    7. Input appropriate FEMA NUMBER

  5. The freeze codes will be automatically removed when the disaster period ends.

    Note:

    If the suspension end date is extended the freeze codes may be removed in error. The freeze codes will be systemically re-input.

4.19.13.24.2  (02-13-2013)
Disaster Procedures - Beginning Suspense Period

  1. For impacted taxpayers with an -S freeze on the account, Campus Examination will continue normal case processing. All contacts with the taxpayers during the disaster period will include Notice 1155, Disaster Relief from the IRS.

  2. For impacted taxpayers with an -O freeze on the account, Campus Examination will suspend normal case processing unless otherwise guided in this IRM sub-section.

  3. Contact with the taxpayer should be suspended until after the disaster ending date.

    Caution:

    Monitor the IRS Disaster Assistance alerts and IRWeb for information regarding extensions to suspense periods.

  4. In addition to the master file freeze codes, disaster coding will also be present on the following IDRS command codes:

    • ENMOD/IMFOLE - transaction code (TC) 971 and action code (AC) 087/688

    • ENMOD/IMFOLE - "2" - Account under special disaster processing per Section 7508(a)

    • AMDISA - "2" - Disaster Victim Code

  5. All disaster cases will be updated to Employee Group Code 5055 until the disaster period ends.

    Exception:

    Cases will remain in EGC 5033/5066/5077/5088.

    If Case is in Status Then And Update Suspense Date
    00-09, 10, 22, 23, 25, 52 or 53 Leave in current status   Add 97 days to current suspense date.
    24 Leave in current status   Add 97 days to current suspense date.
    24 with correspondence Leave in current status Leave date in Corr Rec'd date field on AIMS and CEAS Add 97 days to current suspense date
    51   The case can be closed agreed or no change, complete the closure.

    Note:

    All other types of closures will be suspended.

    Current Date, no suspense date needed
    54, 55 or 57 Update to status 56 Input Action Text with 'CRD MMDDYY' to identify the original Corr Rec'd Date. (This is necessary since status 56 will not keep CRD on the CEAS record) To disaster ending suspense date. Example, Hurricane Sandy 02/08/13
    56 If no correspondence, update to status 13 If in EGC 5066/5077/5088, follow identity theft procedures. To disaster ending suspense date.
  6. Any cases updated from status 24 in error should be corrected.

  7. Generally there should be no correspondence sent to taxpayers in disaster areas during suspension period, unless responding to a taxpayer initiated inquiry or to protect the statute of limitations. Correspondence received for case in EGC 5055 and/or with -O freezes will be screened for agreed, no change cases, and requests to continue their examination within 5 business days of receipt within the function. This includes audit reconsideration and closed case (status 90) mail correspondence.

4.19.13.24.3  (12-14-2012)
Taxpayer Replies During the Suspense Period

  1. Taxpayer replies, including replies received in Status 24 - Agreed or No Change.

    1. Complete case actions for closure

  2. Taxpayer Replies - Disagreed or requests additional time.

    1. Open AIMS - If the taxpayer disagrees and provided information that changes the previous report, delay issuing the revised report for the duration of the notice suppression period. Update to status 56 per table above.

    2. Closed or No Aims - If the taxpayer provides information that changes the addressed report, complete the abatement. Keep the IDRS control base and CEAS record open and, document the action. The taxpayer will be issued the resolution notice after the suspension date ends.

  3. Taxpayer Replies - Requests for examination to continue

    1. Do not remove the disaster freeze codes.

    2. Do not update the case from EGC 5055.

    3. Clearly notate the workpapers to document the taxpayer's request.

    4. Continue to the next required actions,

    5. Prioritize the case by assigning it to a tax examiner to be worked right away.

    6. Case will require manual processing. Systemic processing cannot override the disaster coding on the account.

    7. Include Notice 1155 with any letters and reports to the taxpayer.

4.19.13.24.3.1  (01-02-2013)
No Replies and Undeliverables

  1. No response from the taxpayer

    1. Take no action on no response cases until the suspension period has expired unless necessary to protect the statute of limitations

  2. Undeliverables - Suspend until the end of the disaster period.

4.19.13.24.4  (12-14-2012)
Claims and Amended Returns

  1. Claims or Amended Returns - Work claims (1040X) that have sufficient documentation available to make a determination. Only allow or close claims that would benefit the taxpayer.

  2. Do not start any claims cases; Suspend all actions during the disaster period. The requirement for married filing joint taxpayers to provide a completed Form 3911, Taxpayer Statement Regarding Refund, does not apply when the taxpayer is inquiring about a refund that may have been lost, stolen, or destroyed.

4.19.13.24.5  (12-14-2012)
Statute Awareness

  1. The disaster freeze codes do not extend the statute dates - ASED or CSED.

  2. Examination will protect imminent statutes by issuing statutory notices for taxpayers located in the affected counties during the compliance activity suspension period, if the statute of limitations will expire during that period and a statute extension cannot be secured.

  3. No statutory notices of deficiency will be issued during the compliance activity suspension period if the statute of limitations will not expire during that period.

  4. If the statute of limitations and the 90th day to petition tax court fall within the suspension period, the case(s) will be closed default with managerial approval.

  5. If the CSED or ASED statue is not extended by IRC 7508A, it may be necessary to retain evidence of the initial mailing of deficiency notices.

4.19.13.24.6  (01-01-2015)
Disaster Telephone Procedures

  1. Contact with taxpayers impacted by a disaster must be made with caution and extreme sensitivity to the taxpayer's personal circumstances, using the "soft contact" procedures.

  2. If the taxpayer calls, explain their case has been suspended until the end of the disaster period. Provide the taxpayer with information available on Disaster Assistance and Emergency Relief for Individuals and Businesses at irs.gov. Pub 2194, Disaster Resource Guide for Individuals and Businesses, also contains information for impacted taxpayers. If the taxpayer suffered a loss, they may be able to take a casualty and theft loss.

    Note:

    When making or receiving phone calls, technicians must follow IRM 21.1.3.2.3, Required Taxpayer Authentication, to ensure they are speaking to the appropriate taxpayer and to prevent unauthorized disclosure of tax information.

  3. Advise taxpayer to read Publication 3067 (EN/SP) Disaster Assistance - Federally Declared Disaster Area, and to call our IRS disaster line at 1–866–562–5227.

  4. Additional information can be found at Disaster Assistance and Emergency Relief Frequently Asked Questions at http://mysbse.web.irs.gov/opsupport/cso/stakeholderliaison/disaster/procgdlns/faqs/default.aspx.

  5. If taxpayer states he or she would like the IRS to continue with the examination, we will proceed with the examination. If possible, obtain this request in writing. Provide the taxpayer with e-fax numbers when possible.

  6. For those taxpayers who indicate they have been impacted by the disaster, all compliance activity must be suspended. See IRM 25.16.1.2, Identification of "Covered Disaster Area" and "Affected Taxpayers" , for information regarding taxpayers eligible for disaster relief for self-identification. Taxpayer's self-identifying as impacted by the disaster will have the -O freeze manually placed on their account. See Disaster Freeze Code Instructions at http://mysbse.web.irs.gov/opsupport/cso/stakeholderliaison/disaster/procgdlns/faqs/freezeidprocd/campus/27136.aspx.

  7. If the taxpayer indicates hardship, refer to Taxpayer Advocate Service using Form 911, Request for Taxpayer Advocate Service Assistance (And Application for Taxpayer Assistance Order). Give the taxpayer advocate phone number 1–877–777–4778. The Form 911 should clearly state that the taxpayer made the request after the actual date of the disaster.

  8. Exam will initiate any case actions to provide hardship relief to the impacted taxpayers.

  9. All hardship manual refund requests do not have to go through TAS. Verify if the taxpayer would prefer the manual refund issued as a direct deposit for quicker receipt. See IRM 3.17.79.6.4.2, Certifying Automated Clearing House (ACH)/Direct Deposit Hardship Refunds.

4.19.13.24.7  (12-14-2012)
Identity Theft/Return Preparer Misconduct Disaster Procedures

  1. Do not update cases to EGC 5055.

  2. Screen the identified cases for:

    1. A complete and signed Form 14039 or police report,

    2. authentication documents and

    3. TC 976 or unprocessed returns with refunds.

  3. If cases don't meet the requirements in (2), suspend the cases per the disaster procedures.

  4. Complete the determination process for ID theft cases meeting requirements in (2). For valid IDT determinations, complete the normal referral process. Notate on the top of the referral "Expedite" , and include the name of the current disaster in red.

  5. Return Preparer Misconduct (RPM) cases meeting requirements listed in (2) will be worked on a case by case basis. Before taking any actions on RPM cases, please contact your HQ analyst.

4.19.13.24.8  (02-13-2013)
Disaster Suspension Period Ends

  1. At the end of the disaster suspension period, taxpayer contacts within the designated area must be made with caution and extreme sensitivity to the taxpayer's personal circumstances. Stress and fatigue are factors needing consideration, even in instances where taxpayers did not experience any personal, monetary or physical damage from the disaster.

  2. Resume normal examination procedures after the suspension period has expired.

  3. Before resuming action, review the IRS Disaster Assistance alerts posted and IRWeb for information regarding extensions to suspense periods.

4.19.13.24.9  (01-01-2015)
Reviewing Replies after the Suspension Period Ends

  1. Use good judgement when reviewing documentation.

  2. Consider the taxpayer's situation and impact from the disaster. If the taxpayer states their records were lost or destroyed:

    1. Consider the documents required to substantiate the questionable item and determine if the taxpayer could reconstruct the information, without putting an undue burden on the taxpayer. For example; obtaining mortgage or charitable contributions statements from another source, or obtaining third party documentation to substantiate a child's residence for EITC.

  3. If insufficient or no documentation can be provided:

    1. Annotate work papers with the determination

    2. Managerial Approval is required to close a case no change. The manager needs to leave a CEAS non action note stating they agree to close this case and the reason for closing the case without appropriate documentation.

  4. Work case per IRM 4.19.13.9, Taxpayer Replies, for subsequent action.

  5. We will grant up to an additional 30 days if the taxpayer requests an extension to provide information. Use the following table if the taxpayer requests a reasonable period of time (30 days or less) to comply:

    If Then
    A notice of deficiency has not been issued and the current date is before January 15th of the statute year Grant the request.
    A notice of deficiency has not been issued, and the statute is imminent (current date is after January 15th of the statute year or less than 90 days remaining on the statute of limitations) Attempt to secure a statute extension.
    The statute is imminent (current date is after January 15th of the statute year or less than 90 days remaining on the statute of limitations), and an extension is not secured Issue Statutory Notice of Deficiency
    A notice of deficiency has been issued and the current date is before January 15th of the statute year Grant the request. If the taxpayer files a Form 8626, Agreement to Rescind Notice of Deficiency, then consider the rescission. The date to file a petition in Tax Court cannot be extended. For further procedures on stat notice remission please refer to IRM 4.19.13.24.10, below.
  6. The Statutory Notice of Deficiency must be mailed to taxpayers at their last known address and duplicate notices mailed to all newly discovered addresses.

  7. Cases that were in Status 24 before or during the suspension period must have the default date extended. For the most part, adding 97 days to the original suspension date should result in the revised suspension date. The Service will default cases based on the extended Statutory Notice Period and make the assessments within the prescribed assessment period if the taxpayer has not timely petitioned the Tax Court. If warranted, compute the extended Statutory Notice Period using the following computation:

    1. 90th Day - Disaster Begin Date = Number of Days to Extend Stat Purge Date

    2. Disaster End Date + Number of Days to Extend Stat Purge Date + 16 = New Stat Purge Date

4.19.13.24.10  (12-14-2012)
Taxpayer Requests Rescission of the Statutory Notice of Deficiency

  1. In some cases it will be necessary to rescind the Statutory Notice of Deficiency by following procedures in IRM 4.8.9.28, Rescinding Notices of Deficiency.

  2. Procedures and guidelines for rescinding a Notice of Deficiency:

    1. The taxpayer must initiate the rescission by filing Form 8626, Agreement to Rescind Notice of Deficiency.

    2. All criteria must be met in order to consider the rescission of the Notice of Deficiency. See IRM 4.8.9.28.1, Criteria for Rescinding.

    3. There has to be 90 days left on the Statute or a secured Form 872 or Form 872-A, Consent to Extend the Time to Assess Tax, signed by the taxpayer, or both taxpayers if a joint filed return.

    4. A rescission cannot be entered into if the taxpayer petitioned tax court or it has been 90 days (150 days for notice mailed to addresses outside the United States) since the notice was issued.

    5. If the notice of deficiency was issued to both a husband and wife, the rescission agreement must be signed by both spouses or authorized representative(s) for the parties.

    6. The rescission agreement must apply to the same tax periods as the notice of deficiency.

    7. The rescission agreement must reflect the same deficiency and penalties as the notice of deficiency.

    8. If all conditions above are met, the Form 8626 must be reviewed and agreed upon by a Group Manager or higher. Somebody delegated into the Group Manager position cannot enter into the rescission agreement.

    9. The date of rescission is the date that both parties enter into the agreement.

    10. Send Letter 2262 , Cover Letter for Transmitting Signed Rescission, with a copy of the executed rescission agreement to the taxpayer.

    11. If the Service does not agree, then Letter 2263 , Exception Letter to Notice of Deficiency Rescission, needs to be sent to advise the taxpayer that the rescission is not being granted and the notice of deficiency will remain in effect.

4.19.13.25  (01-01-2015)
Campus Exam Identity Theft

  1. For Identity Theft procedures refer to IRM 4.19.24, Compliance Identity Theft.

4.19.13.26  (01-01-2015)
Mixed Entity Procedures

  1. A multiple filer condition (Mixed Entity) occurs when more than one individual files using the same TIN. If the account has a -A Freeze (TC 976), perform the following TIN-related research:

    1. Use CC IMFOL, RTVUE, NAMES, INOLE, and DUPOL to research taxpayer’s and other TINS listed on the return.

    2. Request all returns for the year(s) involved, including the TC 976 document.

    3. Request MFTRA, type "U" , to obtain NUMIDENT information.

  2. If research shows the same taxpayer created the duplicate filing condition, continue with the audit. If you are unable to make this determination or research shows more than one individual is using the same TIN, follow the mixed entity procedures below for the appropriate AIMS Status.

    Mixed Entity Procedures for appropriate AIMS Status
    If Then
    Case is in AIMS Status 09 or below
    1. Input TC 290 for .00 and Hold Code 4. Input Aging Reason Code (ARC) 09.

    2. Close AIMS by survey closure (DC 31/32).

    3. Forward original and 97X return with Numident print. If available electronically, no prints or copies are required of the returns or Numident, Refer using Form 3210, Document Transmittal, to AM Scrambled SSN Coordinator for account correction. Notate on Form 3210"– A Freeze Mixed Entity Case" .

    4. If Discretionary case, add the following special instructions for AM on Form 3210: If a good SSN is found, return case to Exam after return is submitted for processing with correct TIN.

    Case is Status 10 or above (except Status 24)
    1. Input TC 300 for .00 and Hold Code 4.

    2. Close AIMS DC 12, Priority Code 01. Input Aging Reason Code (ARC) 09.

    3. Forward original and 97X return with Numident print. If available electronically, no prints or copies are required of the returns or Numident, Refer using Form 3210, Document Transmittal, to AM Scrambled SSN Coordinator for account correction. Notate on Form 3210"– A Freeze Mixed Entity Case" .

    4. If Discretionary case, add the following special instructions to Form 3210: If a good SSN is found, return case to Exam after return is submitted for processing with correct TIN.

    Case is in AIMS Status 24
    1. Allow case to age through the Statutory Notice of Deficiency process.

    2. When time to close, pull (or retrieve) print of TXMOD showing the – A Freeze prior to inputting the TC 300 and include in the case file being sent to AM). (AM will not accept case without this print).

    3. Input TC 300 for .00 and Hold Code 4.

    4. Close AIMS DC 12, Priority Code 01. Input Aging Reason Code (ARC) 09.

    5. Forward original and 97X return with Numident print. If available electronically, no prints or copies are required of the returns or Numident, Refer using Form 3210, Document Transmittal, to AM Scrambled SSN Coordinator for account correction. Notate on Form 3210"– A Freeze Mixed Entity Case" .

    6. If Discretionary case, add the following special instructions to Form 3210: If a good SSN is found, return case back to Exam after return is submitted for processing with correct TIN.

    Note:

    Cases should be forwarded to your co-located AM Scrambled SSN Coordinator. For Cincinnati Exam, refer cases to the Memphis Scrambled SSN Coordinator. For Ogden, refer cases to the Philadelphia Scrambled SSN Coordinator.
    If a Form 1040-X, Amended U.S. Individual Income Tax Return, is sent from AM to be associated with an open Exam case, the associated Form 1040X is a mixed entity issue, close the case to the originating AM to resolve.

  3. If the second return has not been processed to a TC 976 DLN on the account, forward the original return to Submission Processing (SP). Complete and attach Form 3893, Re-Entry Document Control. Notate Box 14, Remarks, to return original. Keep a copy of return when sending original to the SP aligned to your campus. Suspend the case pending the document processing.

  4. All incomplete case files will be returned by AM.

  5. It is important to make a distinction between a mixed entity case and cases that are actual IDT. Do not confuse the issue of taxpayer having no knowledge of income earned or a return filed, with an assumption taxpayer is a victim of identity theft. Often the problem is created inadvertently and the problem is a Mixed Entity and/or Scrambled SSN case rather than an intentional use of a stolen identity. Refer to IRM 4.19.13.25, Campus Exam Identity Theft, for procedures if a taxpayer states he/she is a victim of identity theft or provides documentation that supports that determination.

4.19.13.27  (01-01-2015)
Campus Exam Closing Actions

  1. Closing Instructions for Campus Exam:

    Closing Instructions for Campus Exam
    If Then
    Taxpayer replies to any letter and provides enough documentation and verification to no change the case Close case as No Change. Complete Form 5344 with:
    • DC 02

    • Technique Code 02

    • Input TC 300

    • Verify that appropriate "No Change" Issue Codes are correct.

    The No Change Letter 3581 will be systemically generated at case closure.
     
     
    Taxpayer agrees by signing report before the issuance of the Statutory Notice.

    Note:

    On a joint return both signatures must be signed unless the deficiency, including penalty(s), is full paid. See full paid below. If documentation is attached it cannot be closed agreed based on the signatures.

    • Statutory Notice of Deficiency procedures must be used for unagreed spouse if deficiency, including penalty(s) is not full paid.

    • Refer to IRM 4.19.13.11, No Response and Unagreed Cases, if a payment is received after a 90-day letter is issued but no signed agreement is received from the taxpayer.

    Note:

    If the taxpayer attaches documentation to the signed report, the case should not be worked as a signed agreed. Update the case to reply status and work accordingly.

    Close case as Agreed within 14 calendar days of receipt in the Operation. Complete Form 5344 with:
    • DC 04,

    • Reference/Transaction Codes for changed items,

    • Technique Code 02,

    • Agreement Date.

    • Fax Agreement indicator, if applicable

    • Input TC 30X.

     
     
     
     
     
     
    The taxpayer full pays the deficiency, including penalty(s), before the issuance of the Statutory Notice, but does not sign the agreement. Refer to IRM 20.2.4.8.1, Cash Bonds, to differentiate between a cash bond, TC 640 and a payment. Cash bonds are not considered agreed cases. The payment was made to stop the accrual of Interest. Close the case Agreed based on the payment. Complete Form 5344 with:
    • DC 04,

    • Reference/Transaction Codes for changed items,

    • Technique Code 09,

    • Agreement Date.

    • Input TC 30X.

     
    The signed agreement is received in the IRS after the issuance of the Statutory Notice Close case Agreed. Complete Form 5344 with:
    • DC 09,

    • Reference/Transaction Codes for changed items,

    • Technique Code 02,

    • Agreement Date.

    • Input TC 30X.

     
     
    The taxpayer remits full payment of the deficiency, including penalty(s), after the issuance of the Statutory Notice, but does not sign the agreement/waiver in accordance with Rev. Proc. 2005-18 The case cannot be closed until the period for filing a petition with Tax Court has expired and no petition was filed. The case will be closed default if no petition was filed.  
    The taxpayer signs the examination report/waiver sent with the Notice of Deficiency The case may be closed as Agreed, DC 09.  
    Taxpayer does not agree and does not file a petition with the Tax Court after issuance of Statutory Notice Close case as Default after 105 days have expired from the date of Statutory Notice (165 days if Taxpayer is outside country). Complete Form 5344 as follows:
    • Taxpayer replied during examination – DC 10, Technique Code 02.

    • Taxpayer did not reply during examination – DC 10, Technique Code 06.

    • Undeliverable Statutory Notice and taxpayer did not reply during examination – DC 13, Technique Code 07.

    • Undeliverable Statutory Notice and taxpayer replied during the examination – DC 10, Technique Code 2. Leave notation that Statutory Notice Undeliverable in RGS action text.

      Note:

      RGS extension code 99 should not be input if Statutory Notice is undeliverable and there was prior correspondence. See IRM 4.19.20.1.6.2, Taxpayer Correspondence Received After the Issuance of the Statutory Notice of Deficiency Non - CPS Generated Mailing.

    • Input TC 30X.

     
    The taxpayer submits an amended tax return in response to a non claim examination letter; the assessment is processed before it reaches Exam, and resolves all examination issues. Close case using the appropriate Disposal and Technique Codes based on the last examination letter issued.
    • Input TC 300 for 0.00.

    • Input the TC 29X adjustment amount on Item 415 on the Form 5344. Refer to IRM 4.4.12.4.73, Item 415: Amended Return Amount

     
    The taxpayer submits an amended return in response to a non claim examination letter; the assessment is processed before it reaches Exam and does not resolve all examination issues. You cannot close the case. Refer to IRM 4.19.13.9.1, Taxpayer Responses - Additional Information Needed  

    Note:

    Any time the taxpayer replies, use Technique Code 02. It is very important that the appropriate technique code is used. Additional closing instructions can be found in IRM 4.4.12, Examined Closings, Surveyed Claims, and Partial Assessments.

4.19.13.28  (01-01-2012)
Problem Correction Reports

  1. The Problem Correction Report accessed from Control D Web allows the sites to identify pre-refund cases where the refund, held with TC 810, may have been processed incorrectly.

  2. Report #6 provides a listing of Discretionary Exam FTHBC and Adoption Credit cases identified by the following TC 810 DLNs:

    • FTHBC - DLNXX2770028888 5Y

    • Adoption Credit - DLNXX2770028888 3Y

  3. Problem Correction Reports will be worked within 14 days of posting to Control D to ensure taxpayer refunds are issued timely. These reports follow the monthly AIMS reporting cycle, but do not generate a report in January.

  4. Reports will be annotated to reflect the status of cases, and necessary actions taken.

  5. The sites are required to send a summary confirmation via e-mail detailing the results or trends for each report to their respective SB/SE or W&I Headquarter (HQ) Analyst.

  6. Examination personnel will complete the following actions for correct resolution:

    Problem Correction Reports
    Report #6 FTHBC/Adoption If Account has Then
    TC 810, TC 421 and No TC 811 Credit Balance and TC 300 for 0, DC 02 Release Refund with TC 811.
    Credit Balance and DC other than 02 Determine if TC 810 should be released. (Case file may need to be pulled and reopened if closed in error).
    TC 810, TC 811, TC 420, and No TC 421 Been reviewed and it is determined that account had a refund released in error (Pull case file if necessary). Continue the audit.
    Been reviewed and it is determined that the account had been properly resolved (Pull case file if necessary). Input TC 421.
    TC 150 and TC 810 0 No TC 811 or TC 424/420 Credit or debit balance Release the refund.

    Note:

    Annotate the TC 810 listing with the action taken. Retain listing for six (6) months.

4.19.13.29  (01-01-2015)
Victims of Terrorist Attacks

  1. The following sections deal with victims of terrorist attacks

4.19.13.29.1  (01-01-2015)
Deceased Victims of September 11th, Oklahoma City and Anthrax Attacks

  1. Internal Revenue Code section 692(d) allows the forgiveness of income taxes for victims of the terrorist attacks against the United States that occurred on April 19, 1995 (Oklahoma City) or September 11, 2001 (9/11) who die as a result of wounds or injury sustained in these attacks. It also allows the forgiveness of income taxes for victims who die as a result of illness incurred as a result of an anthrax attack that occurred on or after September 11, 2001 and before January 1, 2002.

  2. Income tax is forgiven for 2000 and all later years up to and including the year of death for victims of the September 11th and anthrax attacks. Income tax is forgiven for 1994 and all later years up to an including the year of death for victims of the Oklahoma City attack. However, the law allows the IRS to refund taxes only for certain years. The normal statute of limitations rules for refunds apply to claims for refund.

  3. Individuals filing returns and amended returns for deceased victims of these three specific attacks claiming tax forgiveness should send them to the Kansas City Submission Processing Center (KCSPC) and should annotate them: "KITA – Oklahoma City", "KITA - 9/11", or "KITA - Anthrax". "KITA" means "killed in terrorist attack." Some returns may also show the annotation "Sec. 692(d)(2) Payment" in the "Payments" section of Form 1040 or Form 1040X. TXMOD and ENMOD may show "KITA" in the top right corner.

  4. During processing, returns with the above annotations are routed to the KCSPC KITA Unit for verification and expedited processing. Forms 1040X should not be scanned into CIS.

  5. For more information, see Pub 3920, Tax Relief for Victims of Terrorist Attacks, and IRM 21.6.6.3.22.1, Killed in Terrorist Action (KITA)/Killed in Action (KIA) and Astronauts Killed in the Line of Duty.

4.19.13.29.1.1  (01-01-2015)
Cases Identified in Campus Examination Inventory

  1. If any of the following are discovered or received, follow instructions in the table below:

    1. A return or amended return referencing "KITA - Oklahoma City", "KITA - 9/11", "KITA - Anthrax", or "Sec. 692(d)(2) Payment",

    2. A return or amended return claiming tax forgiveness on behalf of a deceased victim of the Oklahoma City, September 11th, or anthrax attacks,

    3. Correspondence or a telephone call stating the taxpayer died as a result of injuries or illness from the Oklahoma City, September 11th, or anthrax attacks,

    4. TXMOD and ENMOD show "KITA" in the top right corner with an open control in IDRS category "KITA".

      Cases Identified in Campus Examination Inventory
      If discovered or received in: Then:
      Cat-A CIS inventory Return the record to AM with instructions to follow IRM 21.6.6.3.22.2, Technical Unit or Designated Function KITA/KIA and Astronauts Killed in the Line of Duty
      Correspondence Examination Inventory (including unstarted, open, late reply or audit reconsideration) Contact the designated Campus Examination "KITA Coordinator per Who/Where" on SERP for guidance on proper case resolution.
      Exam telephone contact Refer to IRM 4.19.19.6(2), #38, Killed in Terrorist Attack (KITA)

4.19.13.29.2  (01-01-2015)
Disabled Victims of Terroristic Actions - Cases Identified in Campus Examination Inventory

  1. Internal Revenue Code section 104(a)(5) allows the exclusion of disability income received prior to minimum retirement age by individuals for injuries incurred as a direct result of a terrorist action (including the September 11 attacks, anthrax attacks, and Oklahoma City attack) directed against the United States (or its allies). No specific annotations or processing instructions apply to these returns and amended returns, but taxpayers may reference "Publication 3920" or "IRC Section 104(a)(5)".

  2. If a technician or Cat-A classifier discovers or receives a return, amended return, correspondence or a telephone call in Examination inventory or CIS inventory excluding terrorism-related disability income, normal Examination procedures apply.

Exhibit 4.19.13-1 
Transfer Alert Checksheet

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