4.19.13  General Case Development and Resolution (Cont. 1)

4.19.13.23 
Taxpayer Advocate Service (TAS) Procedures

4.19.13.23.4  (04-22-2013)
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 within three (3) workdays of the request, return the case to TAS on Form 3210, Document Transmittal.

  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 of 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: http://mysbse.web.irs.gov/supportingsbse/outcomact/outreach/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 case 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  (01-01-2014)
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 Frequently Asked Questions.

  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 Procedures.

  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  (12-14-2012)
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.

    2. 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.

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

  3. 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.

  4. The Statutory Notice of Deficiency must be mailed to taxpayers at their last known address and duplicate notices mailed to all newly discovered addresses.

  5. 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 taxpayer's if a joint filed return.

    4. A rescission cannot be entered into if the taxpayer petitioned tax court of 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 (DO), 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 (DO), 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  (09-11-2012)
Campus Exam Identity Theft

  1. The following subsections contain procedures on identity theft.

4.19.13.25.1  (01-01-2014)
Identity Theft Overview

  1. IRM 10.5.3, Identity Protection Program, provides service wide guidance on identity theft issues. Refer to IRM 10.5.3 for all information and guidance regarding documentation and actions required for processing identity theft claims. IRM 4.19.13.25, Campus Exam Identity Theft, will provide the Campus Exam functional guidance.

  2. It is important to understand the distinction between tax-related and no-tax related identity theft when considering identity theft issues. Taxpayers with tax-related identity theft issues should be asked to provide evidence of identity theft and documentation to authenticate identity.

  3. Victims are encouraged to report instances of known identity theft to appropriate federal agencies. See IRM 10.5.3.2.2 Taxpayer Interaction.

4.19.13.25.2  (09-11-2012)
Documentation Required

  1. Documentation that is acceptable evidence of identity theft is provided in IRM 10.5.3.2.7, Overview - Identity Theft Supporting Documentation.

4.19.13.25.3  (01-01-2014)
Procedures For All Cases

  1. All cases identified as Identity Theft (IDT) will be worked as priority without unreasonable delay in the Exam Specialized Team.

    1. Pending claim indicators will be input within 48 hours of receipt of an allegation of IDT from a telephone call or correspondence receipt.

    2. AIMS controls and TXMOD control bases will be input within 5 business days of receipt of the Form 14039 and substantiation documents.

    3. The acknowledgment letter (Letter 5064C) will be issued to the victim within 30 days of receipt of the Form 14039 and substantiation documents in the function.

    4. The determination will be made within 30 days of receipt of the Form 14039 and substantiation documents.

    5. Do not update the name and/or address on master file when the SSN owner submits an IDT claim or return. Do not update the name and/or address based on a telephone call. The name and/or address update will be completed by the Specialized teams when the claim has been verified and the valid IDT determination made.

    6. Any correspondence to the SSN owner prior to making the IDT determination will require manual input of the address information on the letter in RGS or IDRS.

    7. The Specialized team examiner will make all necessary changes to the name and address in CEAS/RGS.

    8. The Specialized team examiner will document CEAS and AMS that the name and address were updated based upon the acceptance of the IDT claim.

  2. Document all IDT actions on Correspondence Examination Automation System (CEAS) workpapers and Account Management Services (AMS) in detail. Include all documents received, documents reviewed in CEAS, Correspondence Imaging System (CIS), or AMS and considered in the IDT determination. See IRM 4.19.13.5, Workpapers for All Cases, and IRM 4.19.19.3.3, CEAS Notes.

    1. Open AIMS cases – follow normal procedures for completing workpapers on assigned cases.

    2. Closed AIMS and/or CEAS accounts with Hold Code "X" – retrieve the case from archives and do not open as audit reconsideration (select No at pop-up question). See IRM 4.19.13.25.3.1, Controls, and IRM 4.19.13.25.5, Pending Claims Procedures, for the CEAS status codes used for closed AIMS IDT records.

  3. It is important to make a distinction between a Mixed Entity and/or Scrambled SSN problem and an actual IDT case. Do not confuse the issue of taxpayers having no knowledge of income earned or a return filed with an assumption they are a victim of IDT. See IRM 4.19.13.26, Mixed Entity Procedures.

  4. At any time during the account review, if there is evidence the taxpayer has a filing requirement but has not filed a return, solicit and encourage the taxpayer for a signed return. This applies to any years reviewed and impacted by the IDT incident.

  5. Do not confuse fraud schemes and IDT. If a taxpayer authorized a preparer to file a return, but the preparer added or inflated deductions or credits to obtain a larger refund without the taxpayer's knowledge, this is not IDT. When situations like this are encountered, the examiner needs to consider all the facts and circumstances of the case and work them on a case by case basis.

  6. Closed AIMS IDT cases will be worked by the campus that conducted the original examination. IDT claims for cases that were transferred to Appeals or Tax Court will be worked in Appeals. Transfer the IDT documents to the appropriate IDT Liaison, see ID Theft Liaisons located on the SERP Who/Where tab.

  7. Powers of Attorney – Refer to IRM 4.19.13.7, Power of Attorney and Other Third Party Authorizations, and IRM 21.3.7, Processing Third Party Authorizations onto the Centralized Authorization File (CAF), for additional information as well as the SERP IRM Supplement, Power of Attorney/Third Party Authorizations Toolkit.

  8. Integrated Automation Technologies (IAT) tools will be used when completing identity theft account research and IDRS actions as required by IRM 4.19.13.1.2, Integrated Automation Technologies (IAT) Tools.

4.19.13.25.3.1  (01-01-2014)
Controls

  1. Controls must be placed on all accounts when IDT is alleged or documented by the taxpayer via telephone call, correspondence or referral and when the IDT determination is made.

    1. Aging Reason Code (ARC) 14 is input for any open AIMS case. The ARC 14 remains on the AIMS record regardless of the taxpayer submitting the substantiation documentation or of the IDT determination. Do not overlay ARC 14 with another ARC, unless (b) below applies. ARC 14 will overlay all other ARC. See Campus Exam ARC AIMS Input tool for additional information.

    2. ARC 95 is input for open AIMS cases when the legitimate taxpayer’s return is selected for examination. The ARC 14 will only be overlaid in this situation as soon as the selection is made.

    3. IDRS control bases are input for all cases. Use Control Category Code "TPPI" for all Exam IDT controls. See the Compliance Specialized Team IDRS Controls tool for specific coding input. Input IDRS control bases when: 1) an allegation of IDT is made or; 2) when Form 14039 and documents are received or; 3) when working AM or TAS referrals.

    4. TC 971 AC 522 inputs are required to identify pending IDT claims and the IDT documents received for a specific tax year. Follow the instructions in Compliance TC 971/972 AC 522 Input Fields tool, for specific AC 522 inputs required by Examination.

  2. An IDT indicator is a TC 971 with an AC 501, 504, 505, 506 or 522, 523, 524. For all cases, opened or closed on AIMS, prior to marking an account with TC 971 AC 522 PNDCLM or IRSID, research ENMOD/IMFOLE to ensure the account has not already been marked for the same tax year/incident. If the coding already exists do not input a second code for the same tax year/incident. See IRM 10.5.3.2.5, IDT Tracking Indicators.

  3. Uniform Employee Group Codes (EGC) are used to identify open AIMS IDT cases:

    1. 5066 - IDT alleged by taxpayer per telephone call, correspondence or referral (per telephone call, correspondence, Letter 5064C issued, unsubstantiated referral, etc.).

    2. 5077 - IDT documents received.

  4. The following uniform status codes are used for Campus Exam IDT cases open on AIMS:

    Status Definition
    13 45-day suspense for response to Letter 5064C for additional IDT information; ESTAB requests; any suspense other than status 24 required prior to sending the referral to CPAT/DITA or making the determination.
    38 Extended suspense - AIMS will remain open when IDT account referred to CPAT/DITA and unprocessed return selected for examination (WI only, SB/SE will use status 56)
    24 STN suspense
    56 IDT claim or reply received
    any <90 potential IDT to Spec. Team for screening, case will be updated to EGC 5066

  5. For SB/SE and WI Campus Exam, closed AIMS or archived CEAS records are retrieved and controlled using the following status codes:

    1. 7035 - in process IDT closed case.

    2. 7036 - substantiated IDT cases - accepted and Exam action completed.

    3. 7037 - unsubstantiated or IDT cases determined invalid and Exam action completed.

4.19.13.25.3.2  (04-04-2013)
Multiple Function Controls

  1. All Compliance functions cannot address or reverse an assessment made by another function. The matrix below outlines the function, the authority and where cases will be transferred.

    Function Authority Transfers From
    Tax Court Address own assessments and Exam, AUR, ASFR Exam, AUR, ASFR, CSCO, ACSS, Field Collection
    Appeals Address own assessments and Exam, AUR, ASFR Exam, AUR, ASFR, CSCO, ACSS, Field Collection
    Exam (SB/SE Field Exam, SB/SE Corr Exam, and WI Corr Exam) Address own assessments and AUR, ASFR Exam, AUR, ASFR, CSCO, ACSS, Field Collection
    AUR (SB/SE AUR and WI AUR) Address own assessments AUR, CSCO, ACSS, Field Collection
    ASFR (SB/SE ASFR and WI ASFR) Address own assessments AUR, CSCO, ACSS, Field Collection
    CSCO Assessments not made  
    Field Collection Assessments not made  
    ACSS Address assessments made on original filing and amended return assessments in status 22/24  

  2. The function IDT or ITAR liaisons will be contacted to transfer the controls.

  3. Ownership between SB/SE and WI will be determined by the earliest received date or issues under examination.

4.19.13.25.3.3  (04-04-2013)
Reporting Time

  1. Follow the table below for recording time spent on IDT duties:

    Business Operation Division (BOD) / Operation Case Type Function / Program Codes
    SB/SE Open cases includes ITARS and TAS cases 717 - appropriate program code
    IDT Closed Cases includes ITARS and TAS cases
    • 717–91968 Disc

    • 717–91668 EITC

    Liaison Duties includes ITARS and TAS cases 640–91429
    Telephone (Toll-Free) 707 - appropriate program
    WI - EITC Open Cases 717 - appropriate program code with:
    • fifth digit 2 = ITARS/TAS

    • fifth digit 3 = IDT

    Closed Cases
    • 717–93662 = ITARS/TAS

    • 717–93663 = IDT

    Liaison Duties
    • 720–93652 = ITARS/TAS

    • 720–93653 = IDT

    Telephone (Toll-Free) 707–93600 Count IDT cold calls
    WI -DISC Open Cases 717– appropriate program code with:
    • fifth digit 2 = ITARS/TAS

    • fifth digit 3 = IDT

    Closed Cases
    • 717–93562 = ITARS/TAS

    • 717–93563 = IDT

    Liaison Duties
    • 720–93452 = ITARS/TAS

    • 720–93453 = IDT

    Telephone (Toll-Free) 707–93400 Count IDT cold calls

4.19.13.25.4  (04-04-2013)
Telephone Contacts

  1. Individuals may call the IRS to report that their Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) has been misused to obtain goods or services, to report other complaints of IDT, and/or to request protection of their tax account information.

  2. Do not disclose information to the SSN owner about the account or return information related to the questionable return. Follow disclosure guidance provided in IRM 21.1.3.2, General Disclosure Guidelines, IRM 4.19.19, Examination Telephone Contacts, IRM 4.19.10.3, Disclosure, and IRM 21.9.2.3, Identity Theft – Telephone Overview.

  3. If there are IDT indicators on the account or once you believe you are speaking with a victim or a perpetrator of IDT, follow IRM 21.1.3.2.4, Additional Taxpayer Authentication, and IRM 4.19.19.4.5, Identity Theft.

  4. On all IDT calls, document the call on Correspondence Examination Automated System (CEAS) and Account Management Services (AMS) to confirm the taxpayer was provided instruction on how to file an IDT claim.

  5. Examiners need to use good communication skills and be empathetic to the caller when handling IDT calls. Follow procedures provided in the IRM 4.19.19, Examination Telephone Contacts, for general information on handling calls and specific IDT disclosure guidance. IRM 21.1.1.7, Communication Skills, provides additional service wide communication skill guidance.

4.19.13.25.5  (01-01-2014)
Pending Claims Procedures

  1. A pending claim is when a taxpayer calls or corresponds with" I think I am a victim of IDT" or "I didn’t file this return" or similar statement, this may be considered an IDT allegation or pending claim. The Correspondence Examining Technician (CET) is responsible for providing the taxpayer with the information necessary to file the IDT claim and for placing internal indicators to control the case for IDT.

  2. Individuals not required to file a return may also be negatively impacted by IDT. For example, a caller may state the Social Security Administration (SSA) has reduced or stopped their Social Security benefits based on a tax return filed with the IRS. Advise the callers to obtain the acceptable IDT documentation and attach to the Exam notice or letter they received.

  3. For all cases when an allegation is received, refer to IRM 4.19.13.25.3.1, Controls, for the actions required.

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    Note:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  5. Once the allegation is received, the assigned campus/CET will ensure the AIMS and CEAS updates are completed. If unable to contact the taxpayer by telephone, issue a Letter 5064C using the IAT Letters tool informing the taxpayer of the IDT requirements and process if applicable. See IRM 4.19.13.25.5.2, Unsubstantiated or Incomplete Identity Theft Claims, for specific procedures.

  6. Cases in AIMS status 24 are not updated to status 13 and the 45 day suspense will run concurrently with the 90-day suspense period. The status 24 suspense date is only adjusted if the 45 days ends after the 90-day suspense date.

  7. If no reply after 45 days, the case is updated out of EGC 5066 and returned to normal case processing. The AIMS ARC 14 will remain on the AIMS record.

    Note:

    The campuses are responsible for monitoring the suspense dates for timely action.

4.19.13.25.5.1  (04-04-2013)
Allegations During Telephone Calls

  1. If the allegation is based on a call, the assistor is responsible for inputting a CEAS note as follows:

    1. If the case is open on AIMS input a CEAS Action note to alert the assigned campus to input IDT controls on the case.

    2. If the case is closed on AIMS input a CEAS non-action note. Print the CEAS note and forward to your IDT Liaison for action.

    Note:

    All Campus RGS groups, especially in the Batch and suspense groups are required to monitor and work the Action Notes within three business days. See IRM 4.19.19.3.2, Replying to Taxpayer Inquiries.

4.19.13.25.5.2  (01-01-2014)
Unsubstantiated or Incomplete Identity Theft Claims

  1. When a referral or correspondence from the taxpayer indicates they may be a victim of IDT but, no Form 14039 or authentication documentation was provided, research CC ENMOD/IMFOLE to determine if documentation is required from the taxpayer.

    If And Then
    No Form 14039 or authentication documentation
    1. A posted/unreversed TC 971 AC 501/ 506 or TC 971 AC 522 Source Code IRSID, INCOME, MULTFL,INCMUL, NOFR, or OTHER, and

    2. The posted transaction falls within the three year period (calendar year) and

    3. The allegation relates to a previously reported incident as described in IRM 10.5.3.2.7, Overview – Identity Theft Supporting Documentation.

    Continue with processing the case as a valid IDT claim.
    No Form 14039 or authentication documentation No IDT indicators or no indicators within 3 years on CC ENMOD/IMFOLE
    1. Notify the taxpayer of the requirements for filing an IDT claim by telephone or issue Letter 5064C. See Letter 5064C Input for suggested Letter 5064C fill-in paragraphs.

      Caution:

      Make sure you are contacting the victim and not the perpetrator

    2. Process the case as a pending IDT claim. See IRM 4.19.13.25.5, Pending Claims Procedures.

  2. For closed AIMS cases, verify the original examination was conducted at your PBC. If so, follow the table above. If not, the IDT Liaison will forward to the appropriate Exam campus IDT Liaison.

    Reminder:

    Document all actions in CEAS workpapers and on AMS, see IRM 4.19.13.25.3, Procedures for All Cases.

4.19.13.25.5.2.1  (01-01-2014)
No Response to Telephone Call or Letter 5064C

  1. If there is no response to phone call or Letter 5064C after 45 days,

    1. Open AIMS cases - Continue regular exam processing and move the case to the next step or continue the status 24 90-day suspension. Follow procedures in IRM 4.19.13.25.3.1, Controls.

    2. Closed AIMS cases - Input CEAS Action Text ‘NOREPLY’ and re-archive the CEAS record in status 7037. Follow procedures in IRM 4.19.13.25.3.1, Controls. Input CC TC 472 to resume the collection process.

4.19.13.25.6  (04-04-2013)
IRS-Identified Identity Theft

  1. There are times when the IRS will identify a taxpayer is a victim of IDT. Cases in this category will be processed following the guidance in IRM 10.5.3.2.12, IRS-Identified Identity Theft Affecting Tax Administration – TC 971 AC 506.

  2. A CET may recognize IDT while researching a case, with or without a response from the taxpayer. The ACE/Batch processing filters often provide the indicators to recognize IDT. When this occurs, the IDT determination may be made without contacting the taxpayer to provide Form 14039 and substantiation documentation.

  3. The following are common indicators that may lead to an IRS-identified IDT determination. This is not an all-inclusive list:

    1. A-Freeze rejects

    2. TC 976/977

    3. Decedent Accounts

    4. TC 610, 640 or 670 payments on accounts with refund return filed and late filed balance due return posted as TC 976,

    5. TC 460 extension to file requests with timely (early) filed refund return accounts, or

    6. Returns with filing pattern changes including different unrelated or deceased dependents.

  4. When an indicator of potential IDT is found, follow the guidance provided in IRM 4.19.13.25.8, Complete Account Analysis, to make the determination.

  5. If an IDT determination is made, place the required controls on all impacted tax years. The TC 971 AC 522 Tax Administration source code is IRSID.

  6. Prepare the CPAT Referral checksheet/Form 4442 according to IRM 4.19.13.25.11, Referrals to CPAT/DITA. In the ‘Instructions to CPAT/DITA’ section of the CPAT Referral checksheet, select TC 971 AC 506 and check the Letter 4310C box. When preparing Form 4442, in section B, indicate that TC 971 AC 506 is needed upon account resolution and issue Letter 4310C.

4.19.13.25.7  (01-01-2014)
Substantiation Documentation Received

  1. Once it is determined the documentation provided is complete and legible per IRM 10.5.3.2.7.2, Complete and Legible Documents, issue Letter 5064C to the taxpayer to acknowledge the receipt. Be sure to manually edit the address to the victim’s current information. See tool – Letter 239C Acknowledgment.

    Note:

    If the determination and required action can be completed in 30 days, the determination response will serve as the acknowledgment. Update IDRS, AIMS, and CEAS control bases per IRM 4.19.13.25.3.1, Controls.

  2. Perform case research and analysis to determine whether the IDT claim is valid or invalid. See IRM 4.19.13.25.8, Complete Account Analysis.

4.19.13.25.8  (01-01-2014)
Complete Account Analysis

  1. Perform research to determine the impact of the IDT on all tax years. At a minimum, if applicable, review the 3 prior years and all subsequent tax years when analyzing the taxpayer accounts. The determination made will include resolution for all impacted years to make the taxpayer whole.

  2. Do not assume that the taxpayer filing the IDT documentation is the true owner of the SSN. The CET who reviews the case must consider all information received and available through research to determine the legitimate taxpayer and resolve the case thoroughly and accurately.

  3. Use all available research tools to determine the validity of the IDT claim. The following is a list of the common research tools available, this list is not all inclusive:

    1. IDRS – review prior and subsequent years for filing status, address, dependents claimed, and Schedules A/B/C/D/E/F information for comparison to the TC 150 return and any subsequent returns submitted. CC IRPTR for payer documents may verify income, deductions, and address information reported. Bank routing and preparer information on CC TRDBV is useful. Other research command codes available are IMFOLE, INOLES, DDBKD, RTVUE, TRDBV, and FTBOLP.

    2. CEAS - Review workpapers, notes, and documents for all years available.

    3. AMS/CIS notes or documents – review information posted by other IRS functions

    Note:

    Additional research tools are available using ACCURINT and Treasury Check Information System (TCIS).

  4. Compliance Referral and Research Worksheet – (WI only) complete this form to insure required information is provided to CPAT. The Mixed Entity Scrambled SSN IAT tool can be used in place of the TIN-Related Worksheet.

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  6. If additional clarification or information is needed, attempt to contact the taxpayer by telephone. If unable to reach the taxpayer, issue Letter 5064C to request the additional information.

    Note:

    Examiners are not trained handwriting experts. Do not base your determination solely on the comparison of handwriting and signatures on documents.

4.19.13.25.9  (04-04-2013)
Invalid Identity Theft Determinations

  1. When the IDT claim is determined invalid, prepare a reply to notify the taxpayer of the decision. Include the following wording along with any specific reasons for the determination:" We reviewed your Identity Theft Affidavit and supporting documentation. We determined you are not a victim of identity theft."

    1. If AIMS is open, include the response with the letter appropriate to the case status. Continue regular exam processing and move the case to the next step. Update the EGC out of EGC 5077. ARC 14 must remain on the AIMS account. Close the IDRS Control Base with Activity Code INVLDIDT.

    2. If AIMS is closed, issue Letter 4306, check box 4 and include the statement above. Re-archive the CEAS record in status 7037. Close the IDRS Control Base with Activity Code INVLDIDT. Refile the documents to the TC 300 DLN unless blocking series 400, then input an ADJ54 with TC 290 = $0 to refile the documents.

  2. Input TC 972 AC 5XX to reverse any TC 971 AC 5XX IDT indicator on the account. Use the Compliance TC 971/972 AC 522 Input Fields tool to determine the appropriate input information. If no prior TC 971 AC 501 or 522 is on the account, input the correct TC 971 AC 522 to allow the TC 972 reversal. See also IRM 10.5.3-5, TC 972 AC 501 – Reversal of TC 971 AC 501, or IRM 10.5.3-13, TC 972 AC 522 – Reversal of TC 971 AC 522.

  3. If a TC 470, input TC 472 to reverse the hold and resume the collection process.

  4. If the taxpayer provides falsified or altered documentation, discuss the indicators of fraud with the Campus Fraud Coordinator (CFC) and Exam Fraud Coordinator (EFC) for a potential fraud referral, per IRM 4.19.10.4, Fraud Referrals .

  5. If the IDT claim is determined invalid but there are allegations of return preparer misconduct, provide information on filing a claim (Forms 14157/14157A) and required documents when sending the IDT determination letter. Input TC 972 with tax administration source "OTHER" .

4.19.13.25.10  (01-01-2014)
Valid Identity Theft Determinations

  1. Based on the IDT determination, input TC 971 AC 522 for all impacted tax years per IRM 10.5.3.2.7.3, Marking Taxpayer Accounts When Accepting Identity Theft Supporting Documents.

  2. The determination and action required to adjust the account(s) will be documented and a referral package prepared for post function adjustment work. All IDT post function adjustment work is referred to the CPAT/DITA. Refer to IRM 4.19.13.25.11, Referrals to CPAT/DITA, for specific guidance.

  3. Do not reverse any posted Examination adjustments on the account(s).

  4. If the case is in AIMS status 24 and the statutory notice of deficiency cannot be stopped, follow the guidelines in IRM 4.19.13.25.10.2, Statutory Notice of Deficiency Issued.

  5. If there is a TC 976 or original return from the legitimate taxpayer, see IRM 4.19.13.25.10.4, Unprocessed Returns, for screening procedures.

  6. Once the valid IDT determination is made, update master file to reflect the legitimate taxpayer's current address.

  7. To protect the taxpayer from collection activity while their account is referred to CPAT/DITA for resolution, screen CC TXMODA.

    1. If the taxpayer account is in debit balance (BAL due) and in MF (Collection) status 20, 56, or 58, input CC STAUP with collection closing code (CC) = 0.

      Note:

      A TC 470, CC 0, will prevent notices from being issued for 15 cycles.

    2. Complete Form 14394, Identity Theft/Return Preparer Misconduct Case Collection Alert Form, if any of the following apply. See the Compliance Identity Theft Return Preparer Misconduct Case Collection Alert job aid for additional information:

    3. Did the taxpayer indicate that they have an active levy against them?

    4. Did the taxpayer indicate that the IRS filed a lien?

    5. Is the case in or been in status 22, 24, or 26?

    6. Is there a TC 582 that has not been reversed?

    7. Is there a TC 971 with AC 060-FPLP, TC 971 AC 601-AKPFD or a TC 971 AC 600-SITLP?

    8. Is there a TC 670 DPC 05 on the account?

  8. If there is a TC 582 (lien indicator) posted and the IDT adjustment will result in a zero tax liability, prepare Form 13794, Request for Release, Partial Release, of Notice of Federal Tax Lien. Take the following actions in completing Form 13794:

    1. Input as much information as possible regarding the abatement.

    2. Include the Serial Lien Identification Number of the notice of the Federal Tax Lien if available.

    3. Check box 9 indicating "Erroneous Lien"

    4. Include "ID Theft" in the "Reason" box

    5. Fax or email Form 13794 to the "Collection Advisory Unit" for the state where the taxpayer currently resides. Collection Advisory contacts can be found under the Who/Where tab on SERP Home Page as "Advisory Units Contact List" http://serp.enterprise.irs.gov/databases/who-where.dr/technical.

    Note:

    Notate on Form 3210 or Form 4442 accompanying Form 14394 that the lien was addressed and advise as to whether Form 13794 was sent to Advisory.

  9. The Advisory Unit will review the Notices of Federal Lien (NFTL) filed against the taxpayer using the Automated Lien System (ALS). If all the modules on the NFTL are satisfied, Advisory will request the release of the NFTL as an erroneously filed NFTL per IRC 6326(b). The release of the NFTL will reverse the TC 582. the Advisory unit will abate the TC 360 associated with the NFTL filing and issue Letter 544Letter of Apology - Erroneous Filing of Notice of Federal tax Lien to the taxpayer.

  10. If the taxpayer requests the NFTL be withdrawn, ask the taxpayer to complete Form 12277, Application for Withdrawal of Filed Form 668(Y), Notice of Federal Tax Lien (as based on IRC Section 6323(j)), or they may submit a written request for the withdrawal to the Advisory unit.

    1. Advise the taxpayer to include an explanation regarding the abatement situation and noting the release of the NFTL, if that has taken place.

  11. Inform the taxpayer the determination to grant such request will be made on a case-by-case basis by the Collection Advisory contacts. See IRM 4.19.13.25.10(7)(e), Valid Identity Theft Determinations.

  12. For all cases, issue Letter 5064C to inform the legitimate taxpayer of the IDT determination and the pending account resolution. Include paragraph VI on Letter 5064C per the Identity Theft Acknowledgment Letter Instruction tool.

4.19.13.25.10.1  (01-01-2014)
Income Issue Only

  1. If the determination is resolved as an income issue only, i.e., another taxpayer worked under the valid victim’s SSN, Exam will consider the taxpayer’s information. If it’s acceptable, adjust the examination report to eliminate the questionable income and complete the account resolution without referring to CPAT/DITA.

    1. Input TC 971 AC 501 with Tax Administration source code INCOME or TC 971 AC 506 with Tax Administration source code IRSID.

    2. If needed, update the entity information for the correct address.

    3. If open AIMS, continue with audit and notify the taxpayer of the changes to report with the appropriate letter.

    4. If closed AIMS, input the ADJ54 to correct the account and notify the taxpayer of the changes to the report with Letter 4306.

    5. Complete Form 9409, IRS/SSA Wages Worksheet, if any wage items are removed from the taxpayer’s report, unless the taxpayer has provided a Social Security Administration determination letter on the wage items in question. See IRM 4.19.3.20.7(22) d, Responses Needing Further Action, for additional information and the SSA mailing address.

  2. For all cases with income only in question follow the table below:

    If And Then
    The examination is open No other exam issues
    • Adjust the report to remove the income.

    • Close the case DC 12 with no hold code or priority code.

    • Update master file with the correct address information, if necessary.

    • Issue Letter 5064C to notify the taxpayer of the examination closure.

    • Input TC 971 AC 501 with the appropriate literals to indicate the account resolution for the ID theft incident.

    The examination is open There are other exam issues
    • Adjust the report to remove the income.

    • Follow normal procedures to secure taxpayer agreement or issue statutory notice of deficiency.

    • Notate the case to ensure the ARC 14 and EGC 5077 continue to control the record.

    • Update master file with the correct address information, if necessary.

    • Input TC 971 AC 501/506 with the appropriate literals to indicate the account resolution for the IDT incident.

    • Issue Letter 5064C to notify the taxpayer of the IDT resolution, include paragraph V2 per the IDT Acknowledgment Letter tool.

    • When case is ready to close, the case should be closed DC 12 with no hold code or priority code, and the appropriate adjustment amounts recorded on the Form 5344 ( i.e., TC 30X amount credit reference adjustment amounts and penalties).

    The examination is closed  
    • Prepare a revised report to remove the income.

    • Input CC ADJ54 to post the TC 291 adjustment.

    • Send Letter 4306 with a copy of the report to the taxpayer identifying the adjustments made due to their IDT claim.

    • Input TC 971 AC 501/506 with the appropriate literals to indicate the account resolution for the IDT incident.

4.19.13.25.10.2  (04-04-2013)
Statutory Notice of Deficiency Issued

  1. If the Statutory Notice of Deficiency has been issued, a decision must be made whether to

    1. Proceed with the IDT resolution prior to the 90th day to petition Tax Court date or

    2. Rescind the notice or

    3. Require the full 90-day suspension.

    Note:

    These procedures apply to all Exam programs.

  2. Issue the rescission documents to the legitimate taxpayer at the current address they provided.

  3. The Assessment Statute Expiration Date (ASED) must be considered when making the rescission decision for all cases in status 24. If there are 180 days or less from a statute date, Form 872, Consent to Extend the Time to Asses Tax, must be executed to extend the statute. Follow procedures in IRM 4.8.9.28, Rescinding Notices of Deficiency.

    1. Verify the normal TC 150 statute date; determine the number of days remaining on the TC 150 statute.

    2. If a return was filed by the legitimate taxpayer, SSN owner, verify the received date and determine the number of days remaining on the statute. The return may be a TC 976 document or an original unprocessed signed return submitted with correspondence.

    3. Use the earliest of the statute dates to determine if Form 872 is required.

  4. If there are less than 31 days to the petition date, do not rescind the notice of deficiency. Allow the normal suspense period before following procedures in IRM 4.19.13.25.11, Referrals to CPAT/DITA.

  5. Follow the table below to determine the case processing:

    If And Then
    Status 24, TC 150 determined invalid No Filing Requirement and/or no subsequent return for the valid taxpayer SSN owner Follow procedures in IRM 4.19.13.25.11, Referrals CPAT/DITA.
    Status 24, TC 150 determined invalid Filing Requirement, true Taxpayer responds or true Taxpayer filed (TC 976 or original unprocessed signed return received in Exam)
    1. Rescind SNOD. Follow procedures in IRM 4.8.9.28 Rescinding Notices of Deficiency.

    2. Once the rescission is executed, follow procedures in IRM 4.19.13.25.11, Referrals to CPAT/DITA.

4.19.13.25.10.3  (04-04-2013)
Screening for Nullity Returns

  1. If a filed return meets the criteria defined in IRM 21.6.2-3, IRPTR/IDRS Data Decision Tree, it is considered false and deemed a nullity return.

  2. If the return posted to the account, the nullity return will be reversed from the account without moving it to an Internal Revenue Service number (IRSN) account. Any refund issued is manually moved to the Accounting 1545 ledger by CPAT/DITA.

    Note:

    Instructions to CPAT/DITA must state whether the return can be treated as a nullity with the applicable criteria or needs to be moved to an IRSN.

  3. Compare the TC 150 return and any unprocessed returns to the IRPTR/IDRS Data Decision Tree to determine if nullity treatment applies. Exception to Exhibit 21.6.2-3: Compliance will apply nullity screening to Schedule C returns.

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  5. Once you’ve completed the nullity screening, continue completing the required IDT actions in the subsequent IRM sections.

4.19.13.25.10.4  (04-04-2013)
Unprocessed Returns

  1. Returns not processed as an original return have bypassed DIF scoring. These legitimate taxpayers’ unprocessed returns, whether numbered as TC 976/977 documents or received directly by Exam with correspondence, must be screened per IRM 21.5.2.4.23.6, DIF Score or CLASSIFICATION "Send Return(s) to Examination for Review" .

  2. Unprocessed returns meeting the screening criteria in IRM 21.5.2.4.23.6, DIF Score or CLASSIFICATION "Send Return(s) to Examination for Review" , will be hand walked to the Tax Compliance Officers (TCOs) for priority classification. Local classifiers will expedite unprocessed returns received from Corr Exam marked IDT. These returns will be classified within 3 business days.

  3. If the unprocessed return is not selected for Examination, continue preparing the case for referral to CPAT/DITA.

  4. If an issue(s) on the return is selected for audit, the classifier will determine the portion of the refund attributable to the issue(s) and it should be frozen. Issues normally worked pre-refund during normal pipeline processing (i.e., dependent, EITC, ACTC) will be frozen. The classifier will notate on the Form 6754, Examination Classification Checksheet, the issue(s) and the frozen refund amount. The return will then be return to Corr Exam to continue IDT processing.

    Note:

    Ogden Exam - Contact SB/SE HQ PPM analysts if any returns are selected with EITC issues.

  5. For legitimate returns selected for examination, AIMS ARC, project code, and tracking code will be updated prior to the referral to CPAT/DITA. The audit of the legitimate return will be conducted after the IDT return is removed from the account and legitimate return posted by CPAT/DITA.

    1. Update AIMS to ARC 95

    2. Update the project code and tracking codes:
      DISC - 0275 with tracking code 0990
      EITC - 1026 with tracking code 0990

  6. Include in the instruction to CPAT/DITA on the CP referral Checksheet and Research Worksheet or Form 4442 to:

    1. Remove the TC 150 using nullity procedures if applicable,

    2. Process the legitimate taxpayer's return and

    3. Freeze any refundable credits.

  7. If the unprocessed return meets the nullity criteria, that return is not processed. Annotate the workpapers to document the criteria and determination for nullification. Continue preparing the case for referral to CPAT/DITA to remove the TC 150 return.

  8. If the unprocessed return meets the nullity criteria and the TC 150 return is the legitimate taxpayer's return:

    1. Verify the master file address is correct for the TC 150 taxpayer and update as needed.

    2. Input TC 971 AC 501 with "OTHER" , the CP 01 will systemically generate to the legitimate taxpayer.

    3. Continue the examination of the TC 150 return. AIMS ARC 14 and EGC 5077 will remain on the account through closure. The closure will require priority code 1 to release the TC 976/977.

    4. If the amount was selected to examine the unprocessed return as a claim (source code 30), close the exam using DC 12 with priority code 1.

4.19.13.25.11  (01-01-2014)
Referrals to CPAT/DITA

  1. Based on the Commissioner’s testimony to Congress, IDT processing will be centralized in each business. Centralized Compliance teams were created in each BOD to complete the IDT post function adjustment work. Examination will no longer refer IDT post function adjustment work to Accounts Management.

    1. All Large Business and International (LB&I) and Small Business/Self-Employed (SB/SE) Compliance IDT referrals will be routed to the Designated IDT Adjustment (DITA) team located in Philadelphia.

    2. All Wage and Investment (W&I) Reporting Compliance IDT referrals will be routed to the Compliance Post Adjustment Teams (CPAT) located in Austin and Fresno.

  2. SB/SE Exam – Prepare, print and attach Form 4442 to the case documents routed to DITA.

    Note:

    When referring Frivolous Return Program (FRP) cases to DITA, annotate Form 4442 that the FRP has reviewed and taken necessary actions to release the F freeze.

  3. W&I Exam – The referral package will include:

    1. CP Referral Checksheet

    2. TIN-Related Worksheet or IAT Mixed Scrambled Entities tool

    3. Original documents related to IDT not available as a CIS document, including Numident prints.

    4. Original return(s)

    Note:

    If the TC 150 return is a paper return, the DLN will be requested using ESTAB and the CPAT routing information and IDRS # input in the ESTAB request. Annotate on the referral the ESTAB was input and date.

  4. Keep a copy of all documents in the referral package to be associated with the Exam TC 300 DLN (TC 290 if TC 300 blocking 400).

  5. The following special annotations will be included at the top of the referrals to CPAT/DITA:

    1. STATUTE - if ASED is within 180 days

    2. TAS - referral is a resolution to an OAR

    3. ITARs - Form 14103 Identity Theft Assistance Requests

    4. Compliance Immediate Action Requests

    5. Expedite Unprocessed returns - Campus Exam referrals that request to be expedited so an audit can continue on SSN owner.

    6. High Income - Activity codes 279–281

    7. FRP - FRP cases that have been reviewed and the necessary action to release the F freeze completed (SB/SE only)

  6. Referrals will be routed to CPAT/DITA within 48 hours of completing the determination. Route the referrals by:

    1. E-mail or fax/E-fax if there are no attachments.

    2. Fax/E-fax if there are attachments.

    3. Mail if there is an original return using overnight services.

    4. Campuses with co-located CPAT/DITA teams may hand walk or use internal delivery.

    5. Do not print and forward documents already available for viewing on CIS through AMS.

  7. The referring campus will update the control base assigned to their IDRS team number and employee number "55555" in status "M" with Activity Field input "2CPATIDT" or "2DITAIDT" .

  8. An IDRS case control is established by the referring function to identify the CPAT/DITA site and case type and to assign the IDRS record to the IDRS team number with employee number "00000" . The referring campus will input the Assignee Employee Number based on the CPAT/DITA alignments:

    1. AUSC CPAT - 0684700000

    2. FSC CPAT - 1069800000

    3. PSC CPAT - 0560100000

  9. Control Category Code TPPI is designated for all Compliance IDT cases.

  10. Use the following chart for control field inputs, for consistency and to aid in monitoring referrals.

    Note:

    The IRS Received Date is the date the taxpayer’s complete IDT claim (Form 14039 and required substantiation documents) is received or the date of IRS-identified IDT action:

    CASE STATUS Activity Codes DEFINITION IRS RECEIVED DATE
    A
    • ID2FPROG

    • ID2APROG

    • ID2PPROG

    • Exam referral action completed and forwarded to FSC (F), AUSC (A) or PSC (P), includes global reviews;

    • ID- Referring Campus ID number from table below

    • Program - DISC or EITC

    IRS Received Date
    A
    • ID2FPROGQ

    • ID2APROGQ

    • ID2PPROGQ

    • Exam referral action completed and forwarded to FSC (F), AUSC (A) or PSC (P), includes global reviews;

    • ID - Referring Campus ID number from table below

    • Program - DISC or EITC

    • QTP (Q) case - this includes project codes with tracking code 7571 or others designated for QRP issues

    IRS Received Date
    A
    • ITR2FPROG

    • ITR2APROG

    • ITR2PPROG

    • ITR2FPROGQ

    • ITR2APROGQ

    • ITR2PPROGQ

    • ITAR Exam referral action completed and forwards to FSC (F), AUSC (A) or PSC (P), includes global reviews;

    • ID - Referring Campus ID number from table below

    • Program - DISC or EITC

    • QRP (Q) case - this includes project codes with tracking code 7571 or others designated for QRP issues

    Received Date of Form 14103
    A
    • TAS2FPROG

    • TAS2APROG

    • TAS2PPROG

    • TAS2FPROGQ

    • TAS2APROGQ

    • TAS2PPROGQ

    • TAS Exam referral action completed and forwards to FSC (F), AUSC (A) or PSC (P), includes global reviews;

    • ID - Referring Campus ID number from table below

    • Program - DISC or EITC

    • QRP (Q) case - this includes project codes with tracking code 7571 or others designated for QRP issues

    Received Date of Form 12412

    SB/SE Campus ID Code WI Campus ID Code
    Brookhaven 19 Andover 08
    Cincinnati 17 Atlanta 07
    Memphis 49 Austin 18
    Ogden 29 Fresno 89
    Philadelphia 28 Kansas City 09

  11. Once received, the CPAT/CITA team will re-assign the control base for staging and monitoring purposes.

  12. If control bases are required by other programs, example TAS, then a separate control base is opened to track the IDT actions.

  13. When the referral is forwarded, issue Letter 5064C to the taxpayer notifying them of the status of the account resolution. See the Letter 5064C Input tool for specific guidance.

  14. Update the CEAS and AMS records of the case action and referral to CPAT/DITA.

4.19.13.25.12  (04-04-2013)
Closing AIMS

  1. Open AIMS cases will be closed with Disposal Code (DC) 12 and no adjustments posted to the account. Input TC 300 $0.00, Manual Assessment $1 (Item 35), Hold Code 4, and Priority Code 1. Review the CEAS Form 5344 to remove all other transaction, interest, penalty and reference codes on Form 5344, Items 12 and 15. No adjustments are to be posted to the account with the TC 300 $0.00.

    Reminder:

    A monitor control base must be maintained by the Specialized Team while the referral is with CPAT/DITA.

  2. The CEAS record(s) will be updated or re-opened from archives and updated to status 7036.

  3. If the unprocessed return was selected for examination, W&I cases are updated to AIMS status 38 and SB/SE cases are updated to AIMS status 56. See IRM 4.19.13.25.3.1(4), Controls. The AIMS ARC must be updated to 95. The cases are suspended while the referral is made to CPAT/DITA.

  4. A copy of the IDT affidavit and supporting documents will be maintained by the Specialized Team while the referral is with CPAT/DITA. When CPAT/DITA completes the account resolution the Exam case file copies will be refiled as attachments to the TC 300 DLN. This includes any other paper documents not available electronically or required by IRM 4.19.13.17, Case File Assembly.

4.19.13.25.12.1  (04-04-2013)
Unstarted Cases (Status 09 or Below) Closures

  1. Once the valid IDT determination is made;

    1. Cases in Status 06 or below will be closed DC 20 and referred to CPAT/DITA

    2. Cases in Status >06 will be updated to status 13, then closed DC 12 with Priority Code 1 and Hold Code 4, then referred to CPAT/ DITA.

    Note:

    Exception: do not close accounts if the unprocessed return was selected for examination. The case will be updated to status 38 when the referral is made to CPAT/DITA.

4.19.13.25.13  (01-01-2014)
Completed Account Resolution Actions

  1. When CPAT/DITA completes the referral and the account resolution has made the taxpayer whole, the control base will be reassigned to the referring Exam specialized team IDRS group number and employee number 77777.

  2. Close monitoring controls and complete closing actions within 5 business days of the weekly posted CCA 4243 listing for the Specialized team.

  3. If necessary, issue Letter 5064C, TIN-Related Problem Resolution, notifying the taxpayer of the resolution of their account. See the Letter 5064C Input tool for specific guidance.

  4. Archive the CEAS records after notating the completed actions.

    1. If AIMS was closed DC 12 when the referral was sent to CPAT/DITA, archive the case in St. 90.

    2. If the CEAS record was pulled from archives and in status 7035, close the CEAS record by updating to status 7036 and archiving.

  5. Close the IDRS control base with Activity "EXIDTRSLVD" .

4.19.13.25.13.1  (01-01-2014)
Actions to Initiate the Examination of the Legitimate Return

  1. If an examination is to be started on the valid taxpayer return, do not close the AIMS base.

  2. When sending the Letter 5064C include the paragraph notifying the taxpayer they will be receiving additional information regarding a review of their return. See the Letter 5064C Input tool for specific guidance.

    1. Update AIMS to ARC 95, the EGC may be updated from 5077.

    2. Update AIMS to the appropriate project code based on the classified issues.

    3. Issue the first contact letter to the taxpayer to start the new exam within 10 days of receiving the completed referral returned from CPAT/DITA.

  3. Close the IDRS control base with Activity "EXIDTRSLVD" .

4.19.13.25.14  (04-04-2013)
Referrals from Taxpayer Advocate Service (TAS)

  1. IDT allegations and claims will continue to be referred from TAS when they meet TAS criteria 1-4. TAS also has the discretion to assign and refer any criteria 5-7 cases.

  2. IDT OARs will be routed through the Exam TAS liaison and follow normal TAS procedures per IRM 4.19.13.23, Taxpayer Advocate Service (TAS) Procedures. IDT OARs will be worked in the Specialized Teams.

  3. The TAS liaison will work with the IDT liaison to insure both TAS and IDT procedures are followed and dual controls maintained on the accounts.

4.19.13.25.15  (04-04-2013)
Referrals from Accounts Management

  1. The Accounts Management (AM) Identity Protection Specialized Unit (IPSU) was established to be the initial contact to assist taxpayers who are victims of IDT. IRM 21.9.2, Accounts Management Identity Theft, and IRM 10.5.3, Identity Protection Program, provide guidance on the actions completed by IPSU.

  2. When IPSU determines the IDT claim or allegation is a tax-related incident, a referral is prepared and issued to the controlling function. There are two referral types prepared by AM that are routed to Exam to the IDT or Identity Theft Assistance Request (ITAR) Liaison, as applicable:

    1. Form 14027-B, Identity Theft Case Referral, for pending claims or IDT claims received in AM with Exam controls.

    2. Form 14103, Identity Theft Assistance Request (ITAR), IDT cases that meet TAS criteria 5-7. See IRM 13.1.7.2, TAS Case Criteria.

4.19.13.25.15.1  (04-04-2013)
Responsibilities of Exam ITAR Liaison

  1. Each function has an ITAR Liaison who is responsible for coordinating ITAR referrals to and from IPSU. A list of Functional ITAR Liaisons is located on the SERP Who/Where tab.

  2. The Exam ITAR Liaison will:

    1. Screen all incoming and outgoing Form 14103 ITAR referrals to verify they meet TAS criteria 5-7 per IRM 21.9.2.10, Identity Theft Assistance Request (ITAR) – General Information. Reject all ITAR referrals not meeting the criteria, i.e., no IDT verification documents or has an open TAS control on Master File.

      Note:

      All ITARs should contain the IDT documentation and any other applicable documentation from the taxpayer. Reject any ITARs if the required documents are missing or incomplete or unavailable electronically.

    2. Acknowledge receipt of ITAR cases referred within five business days via secured e-mail or fax number provided by the IPSU employee on the Form 14103, Section II, Box 3.

    3. Review Form 14103 and determine whether the recommended action is appropriate and the requested completion date is reasonable.

    4. Contact the IPSU employee shown in Section II if there are questions regarding the recommended action or if additional time is required. The Exam ITAR Liaison and IPSU employee must reach an agreement on the substantive case issues, recommended actions and follow-up and completion dates.

    5. Maintain a log of all ITAR referrals. W&I only: submit the log monthly to the HQ analyst.

    6. Establish IDRS master file controls and assign accounts.

    7. Monitor all open ITARs and address potential or aged completion dates.

    8. When the case is completed, timely fax or e-mail Form 14103 to IPSU with all required fields completed and copies of all letters and forms. The fax number is shown on Form 14103 in Section II, Box 3.

  3. For Exam identified ITAR cases, review Form 4442 prepared by the examiner and send via secure e-mail to wi.itar@irs.gov or by fax to the IDT fax line (978) 247-9965 by close of business (COB) the day the criteria was identified. The referral must contain all taxpayer’s correspondence with any attachments/documentation received with the case.

4.19.13.25.15.2  (09-11-2012)
Identity Theft Assistance Request (ITAR) Examiner Procedures

  1. ITARs follow the same requirements as OARs. Examiners have the following responsibilities:

    1. Contact the IPSU employee shown in Section II if there are questions regarding the recommended action or if additional time is required. The examiner and IPSU employee must reach an agreement on the substantive case issues, recommended actions and follow-up and completion dates. If the completion date is re-negotiated by the examiner, notify the ITAR Liaison of the new completion date.

    2. Correspond directly with the taxpayer. Keep copies of all letters and forms sent to and received from the taxpayer.

    3. In addition to documenting CEAS workpapers, document all actions in AMS.

  2. When the ITAR case is completed, return the completed Form 14103 with copies of all letters and forms to the Exam ITAR Liaison to review and fax to IPSU.

    Note:

    IRM 21.9.2.9 Identity Theft Assistance Request (ITAR) – General Information, provides specific AM IPSU referral procedures.

4.19.13.25.15.3  (04-04-2013)
Exam Initiated ITARs

  1. If the examiner determines an IDT case meets ITAR criteria 5-7 during the review of correspondence or on a call with a taxpayer the examiner must alert their Lead or manager to initiate resolution of the IDT claim.

  2. If the action cannot be completed or initiated within 24 hours, prepare Form 4442, Inquiry Referral, and forward to the Exam ITAR Liaison according to IRM 21.9.2.10, Identity Theft Assistance Request (ITAR) – General Information.

    1. The liaison will review for accuracy and fax to IPSU.

    2. The examiner will input a CEAS Action note according to IRM 4.19.19.3.3, CEAS Notes, to alert the assigned campus of the pending ITAR.

4.19.13.25.15.4  (04-04-2013)
AM IPSU Form 14027-B, Identity Theft Case Referrals

  1. When IPSU receives allegations of IDT or IDT claims and determines another function has open controls on the case or if the taxpayer is responding to a function’s notice, they will prepare Form 14027-B, Identity Theft Case Referral, and route it the functional Identity Theft Liaison (ITL).

4.19.13.25.15.5  (04-04-2013)
Responsibilities of the Exam Identity Theft Liaison (ITL)

  1. The Exam ITL will coordinate and monitor all IDT actions for their designated campus Examination operation. This includes all referrals to and from the operation that do not meet ITAR criteria.

  2. When Form 14027-B, Identity Theft Case Referral, is received from IPSU, the ITL will

    1. Acknowledge receipt of the form by filling out Section V on page 2 and fax back to IPSU or reject Form 14027-B within 5 days.

    2. Maintain a log of all ITAR referrals and submit it monthly to the HQ analyst.

    3. Establish IDRS master file controls with the appropriate Activity Codes provided in the Exam IDT Control Base Input tool.

    4. Monitor all open Forms 14027-B and address potential or aged completion dates.

    5. Assign the case to an examiner within two business days.

    6. Review completed cases and return Form 14027-B to IPSU.

      Note:

      AM IPSU will not route the IDT documents if they are available electronically on AMS.

4.19.13.25.15.6  (04-04-2013)
Form 14027-B, Identity Theft Case Referral, Examiner Procedures

  1. The CET assigned to the Form 14027-B account is responsible for meeting or negotiating new completion dates and keeping the AM caseworker apprised of the status of the Exam actions. Notify the ITL of any updates to the completion date.

  2. Case action will be based upon:

    If Then
    Taxpayer did not provide documentation within 45 days of being provided information on filing an IDT claim by AM or Exam
    1. Complete Form 14027-B, Section VIII, 4. Comments: No Reply from TP,

    2. Update IDRS control base; NOREPLY

    3. Input TC 971 AC 522 "NOREPLY" , and

    4. Continue normal case processing

    Taxpayer submitted documentation unrelated to the IDT issue or did not substantiate the IDT claim
    1. Complete Form 14027-B, Section VIII, 4. Comments: No IDT substantiation from TP,

    2. Update IDRS control base: NOIDTSUBST,

    3. Input TC 971 AC 522 "NOIDT" , and

    4. Continue normal case processing

    Taxpayer submitted documentation that supported the IDT claim
    1. Complete Form 14027-B, Section VIII, 4. Comments IDT substantiation received and determined valid IDT claim; check "Yes" in box 3,

    2. Update IDRS control base: IDTSUBST

    3. Input TC 971 AC 522 according to procedures in Exam TC 971/972 AC 522 Input Fields tool,

    4. Conduct complete case analysis and prepare the referral per instruction in IRM 4.19.13.25.11, Referrals to CPAT/DITA

  3. Route completed Form 14027-B to the ITL for review and return to the AM IPSU caseworker.

  4. A copy of the Form 14027-B must be kept with the Exam audit package.

4.19.13.25.16  (04-04-2013)
Special Procedures

  1. Dependents may file as victims of IDT. If the SSN was used to file a return, follow IDT procedures outlined in this IRM to resolve the account. If the SSN was used as a dependent on another return generally duplicate TIN program filtering is applied. Additional information on dependents as victims of IDT is available in IRM 10.5.3, Identity Protection Program.

  2. Non-Filer IDT cases will be worked according to IRM 4.19.17, Non-Filer Program.

  3. Refer to IRM 4.19.10.6, Return Preparer Scheme Identification, for procedures for preparer and ITIN preparer schemes.

  4. Referrals from Automated Collection Systems Support (ACSS) or Collection operations will be screened and reviewed following Exam IDT procedures. ACSS or CSCO will forward IDT claims if there are current or prior Exam controls on the impacted account.

  5. Misrouted referrals and referrals to other functions: Service wide procedures are being developed for IDT referrals between functions. When sending a referral to another function other than CPAT/DITA, complete Form 4442 and forward to the Identity Theft Liaison.

4.19.13.25.17  (04-04-2013)
Statute Protection

  1. Do not forward statute year referrals to CPAT/DITA without completing the screening procedures outlined in this section.

  2. IRM 25.6 Statute of Limitations, provides the service-wide procedures for identifying and processing statute returns. Examination will follow the guidelines set forth in IRM 25.6 Statute of Limitations, with the noted exceptions provided in this section.

  3. Statute procedures apply to IDT referrals if the Assessment Statute Expiration Date (ASED) is within 180 days of expiring.

    1. Verify the TC 150 statute date; determine the number of days remaining on the TC 150 statute.

    2. If a return was filed by the legitimate taxpayer, SSN owner, verify the received date and determine the number of days remaining on the statute. The return may be a TC 976 document or an original unprocessed signed return submitted with correspondence.

    3. Use the earliest of the statute dates.

  4. Generally, Form 872 will not be solicited from the legitimate taxpayer or the perpetrator on IDT cases.

  5. Do not reverse or make any adjustments to the accounts. Credit transfers to excess funds can be completed after the ASED.

  6. IDT referrals fall into 3 general categories:

    1. Single Return

    2. Multiple Return, Legitimate Taxpayer Return not posted to the account

    3. Multiple Return, Legitimate Taxpayer Return assessment/adjustment posted to the account (TC 29X)

4.19.13.25.17.1  (09-11-2012)
Single Return

  1. Review IDRS to verify no TC 976 or 977 transactions are on the account and review the case documents to verify no unnumbered unprocessed returns were received from the taxpayer.

    1. If there is no TC 976/977 or unprocessed return, no action for statute protection.

    2. If there is a TC 976/977 or unprocessed return, follow Multiple Return procedures.

4.19.13.25.17.2  (04-04-2013)
Multiple Returns

  1. For accounts with the legitimate taxpayer return not posted to the account or requiring additional assessments a protective assessment will be required.

    1. If the legitimate taxpayer return is posted to the account, compare the account adjustments to determine if all assessments match the legitimate return figures or if additional assessments are required.

  2. To request a protective assessment, prepare Form 2859, Request for Quick or Prompt Assessment, annotate at the top of the form "ID Theft Statute Year" .

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    1. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    3. In Part B, Requestor Information, input the name and campus preparing the document and input the CPAT/DITA site contact information. The CPAT/DITA liaison will be the contact for Accounting to determine the final posting information.

  4. Prepare Form 3210 and fax or hand walk the Form 2859 and statute return to the applicable Accounting Operation.

  5. Input a control base assigned to the employee requesting the prompt assessment with Activity Code "QUIK ASSMT" . CPAT/DITA will reassign the control base when the statute referral is received.

    Note:

    This is a separate control base from the normal IDT control base.

  6. Keep a copy of the legitimate taxpayer’s return and Form 2859 with documentation for monitoring.

    1. Prepare the referral to CPAT/DITA and annotate at the top of the referral form "ID Theft Statute Year" . If the taxpayer is due a refund, include a note to issue a manual refund. Send the statute referral to CPAT/DITA through overnight mail services or hand walk to CPAT/DITA if co-located.

4.19.13.26  (04-04-2013)
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. See IRM 3.12.37.32.3Preparing Form 3893. 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, 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  (01-01-2014)
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 penalt(ies), 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 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 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 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.

Exhibit 4.19.13-1 
Transfer Alert Checksheet

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