Part 4. Examining Process

Chapter 25. Estate and Gift Tax

Section 10. Case Closing Procedures

4.25.10  Case Closing Procedures

Manual Transmittal

February 28, 2013

Purpose

(1) This transmits a complete new section of IRM 4.25.10, Estate and Gift Tax, Case Closing Procedures.

Background

IRM text pertains to Estate and Gift Tax Examination closing procedures. This IRM provides direction which is Estate and Gift Tax specific.

Material Changes

(1) As part of the expansion and restructuring of 4.25, Estate and Gift Tax, the following parts were removed from 4.25.1 and were moved to and modified in 4.25.10:

  1. IRM 4.25.1.1.11, Procedures at Conclusion of Examination (10-25-2011) is incorporated and modified into the newly created IRM 4.25.10.1, Conclusion of Examination In General.

  2. IRM 4.25.1.1.12, Procedures at Conclusion of Examination-No-Change with Adjustment Closings (10-25-2011) is incorporated and modified into the newly created IRM 4.25.10.2.3, Conclusion of No Change with Adjustments Examination.

  3. IRM 4.25.1.1.13, Procedures at Conclusion of Examination-No-Change with No Adjustments Closings (10-25-2011) is incorporated and modified into the newly created IRM 4.25.10.2.2, Conclusion of No Change No Adjustments Examination.

  4. IRM 4.25.1.1.14, Procedures at Conclusion of Examination-Agreed Cases (10-25-2011) is incorporated and modified into the newly created IRM 4.25.10.2.4, Conclusion of Agreed Examination.

  5. IRM 4.25.1.1.15, Procedures at Conclusion of Examination-Unagreed Cases (10-25-2011) is incorporated and modified into the newly created IRM 4.25.10.2.6, Conclusion of Unagreed Examination.

  6. IRM 4.25.1.1.16, Procedures at Conclusion of Examination-Partially Agreed Cases (10-25-2011) is incorporated and modified into the newly created IRM 4.25.10.2.5, Conclusion of Partially Agreed Examination.

(2) SBSE-04-0312-027, Interim Guidance on Closing Procedures for Estate and Gift Tax Cases is replaced by the newly created IRM 4.25.10.3, Case Closing Procedures in General and 4.25.10.4, Case Closing Procedures by Type of Closure.

Effect on Other Documents

This material supersedes Interim Guidance SBSE-04-0312-027, dated March 30, 2012, on Closing Procedures for Estate and Gift Tax Cases.

Audience

This section contains instructions and guidelines for Small Business/Self-Employed Estate and Gift Tax Specialty Programs employees.

Effective Date

(02-28-2013)

John H. Imhoff, Jr
Director, Specialty Programs
Small Business/Self-Employed

4.25.10.1  (02-28-2013)
Conclusion of Examination in General

  1. This section provides information on procedures in concluding an examination of estate and/or gift tax returns, including taxpayer rights and report writing requirements.

4.25.10.1.1  (02-28-2013)
Taxpayer Rights

  1. Once a determination regarding adjustments to an examined return has been made, the examiner should discuss findings with the taxpayer and/or authorized representative.

  2. If a change in the tax assessment or use of the applicable credit amount is proposed, or if the taxpayer otherwise has a right to appeal the findings, the examiner must issue Publication 3498, The Examination Process, to the taxpayer as an attachment to the first draft report.

    1. Send Publication 3498 (taxpayer has appeal rights):

      • Where a change in assessment of tax is proposed in the examination of a Form 706 or Form 709.

      • Where a decedent’s Form 706–U.S. Estate Tax Return, shows the estate elected to port DSUE (Deceased Spousal Unused Exclusion) amount, and the examination results in an assessable change to the reported tax (includes where DSUE is zeroed out and the estate is now taxable).

      • Where a decedent’s Form 706 shows the estate has used DSUE (during life on Forms 709 - United States Gift (and Generation - Skipping Transfer) Tax Return or at death), and examination results in an assessable change to the estate’s reported tax.

      • No Change with Adjustments for a donor’s Form 709, where an adjustment to the gift reported by the donor is based on legal or valuation issues. Donor has rights under IRC 7477.

      • No Change with Adjustments for a donor’s Form 709, where the only change(s) affect the DSUE available to the donor (and no adjustment to the gift reported by the donor is based on legal or valuation issues), the donor has no rights under IRC 7477, but may appeal the findings under IRM 8.1.1.3.2—No Immediate Tax Consequence Cases.

    2. Do NOT send Publication 3498 (taxpayer has no appeal rights):

      • No Change with Adjustments for a decedent’s Form 706, where no DSUE election was made and there is no change to the reported tax.

      • No Change with Adjustments for a decedent’s Form 706, where a DSUE election was made, and there is a change to the DSUE amount, but the estate is still not taxable. This includes:

        • DSUE amount is zeroed out, but still no tax (exact situation).

        • DSUE amount is changed, but not zeroed out.

      • No Change with Adjustments for a decedent’s Form 706, where the decedent used DSUE during life or at death.

4.25.10.1.2  (02-28-2013)
Report of Examination Results and Waiver

  1. Prepare the applicable Examination Report forms for issuance to the taxpayer and authorized representatives. Generally, the Examination Report shall include the following:

    1. Form 1273, Report of Estate Tax Examination Changes, compares the “As Corrected” tax with the tax previously assessed and indicates the net deficiency or overassessment. The first column is entitled "Shown on Return." The figures to be entered here are the last assessed amounts, which may differ from those shown on the return. Form 1273 contains a summary of the adjustment in tax and a computation of the estate tax.

      Note:

      Review IDRS transcript of account to ensure that the correct assessed tax is reflected on all reports. The IDRS transcript should be current and in any case no older than 15 days.

    2. Form 3233, Report of Gift Tax Examination, is used for gift tax audits.

    3. Form 6180, Adjustment to Taxable Estate, is used to summarize the net change on each schedule of the Form 706.

    4. Form 886–A, Explanation of Items, is used in estate or gift tax reports to explain in detail each adjustment shown in the columns entitled "Shown on Return" and "As Corrected." Each schedule should be titled and treated individually in alphabetical order. A full and adequate description of each adjustment should be included on Form 886–A.

    5. Exhibits, computations and other material needed to explain changes to the taxpayer should be attached when appropriate. For example, computations used in determining the value of an item should be attached to the report.

    6. When an Engineering, Economist, or Other Expert report has been prepared and the findings accepted, the copy designated "Taxpayer's Copy" should be attached as an exhibit to the Form 1273 or Form 3233. If the examiner previously submitted the report to the taxpayer, an additional copy of the appraisal does not need to be attached to the report. This should be documented on the Form 9984.

    7. Except for the final report included in the closed case file, all reports sent to the taxpayer should be stamped or labeled as “Draft.”

      Note:

      Report writing procedures are set forth at IRM 4.10.8, Report Writing.

  2. Form 890, Estate Tax Waiver of Restrictions on Assessment and Collection of Deficiency and Acceptance of Overassessment, is used to document that the taxpayer agrees to the proposed adjustments and is waiving the statutory restrictions upon assessment and collection of the deficiency in tax. The execution of this form permits the Service to assess the deficiency, schedule the overassessment, or adjust the applicable credit amount immediately. It also stops the running of interest from the 31st day after the date of receipt until notice and demand for payment is made. Form 890 does not constitute a final closing agreement. It does not preclude reopening of the examination by the taxpayer or by the Service.

    1. Form 890 is used for fully and partially agreed cases. It should reflect the exact amount of the deficiency, overassessment, applicable credit amount, and/or penalty agreed to. Form 890 should be date stamped when received.

      Note:

      Form 890-T is used for agreed transferee liability cases. See IRM 4.25.1.4.3.

    2. If the amounts shown on the signed Form 890 are incorrect due to an error in computation, and the error would result in an incorrect billing or refund, the report will be written for the corrected amount and a statement will be made on the report explaining the change. If the correction is in favor of the taxpayer, it is not necessary to obtain a new waiver. If the correction is against the taxpayer, a supplemental waiver for the difference between the corrected amount and the amended amount will be secured. The supplemental waiver will be clearly marked as such and stapled on top of the original waiver.

    3. Do not alter the amounts on a signed waiver. Do not solicit a blank signed waiver.

  3. Examiners may verify interest computations regarding IRC 6166 with the Cincinnati Campus. To request a review or verification of a computation, contact the Campus Processing Unit for your territory by fax or E-mail. The contact information for each territory is available on the E&G Web Site. E-mail with taxpayer data must be sent using the secure messaging feature. The subject line of the secure message should not include any taxpayer information. Responses will be provided within one week. Information needed to verify interest calculations includes:

    • Copy of audit report with tentative interest computation, if seeking a verification of its accuracy;

    • Copy of audit report without interest computation, if seeking computation of interest;

    • Name of taxpayer;

    • Date of death, if applicable;

    • Social security number of taxpayer; and

    • Specifics of case needed to calculate interest.

4.25.10.2  (02-28-2013)
Conclusion of Examination by Type of Closure

  1. This section provides specific information on concluding an examination based on the type of closure.

4.25.10.2.1  (02-28-2013)
Conclusion of Survey After Assignment

  1. Examiners who survey a case after assignment will use Form 3187, Survey After Assignment, to explain the reasons for the survey decision, or include a complete written explanation in the Form 9984 and the appropriate work papers. The total number of hours on the case, including time charged directly to the case and time charged to Code 615, Survey, will be noted on the Form 3187 in the "Enclosures" block. If the Form 3187 is not used, then the total number of hours, including time charged directly to the case and time charged to Code 615, Survey, should be noted on the Form 9984. The case will be hand-stamped "Survey After Assignment" and must display the dated signatures of the examiner and the group manager.

    • Select the ‘Manage Survey’ in IMS button to access the Form 3187.

  2. Refer to closing procedures below at IRM 4.25.10.4.1 (1), for closing a surveyed case and IRM 4.25.10.4.1 (2), for closing a surveyed claim.

4.25.10.2.2  (02-28-2013)
Conclusion of No Change No Adjustments Examination

  1. Prepare a Form 1273, Report of Estate Tax Examination Changes, or a Form 3233, Report of Gift Tax Examination.

  2. A report must be issued and must include the following language: “NO-CHANGE-SUBJECT TO CHIEF, ESTATE AND GIFT TAX APPROVAL”.

  3. Refer to closing procedures below at IRM 4.25.10.3, Case Closing Procedures in General, and IRM 4.25.10.4.2, Case Closing Procedures for No Change No Adjustments.

4.25.10.2.3  (02-28-2013)
Conclusion of No Change with Adjustments Examination

  1. No Change with Adjustments cases include changes to Applicable Credit Amounts, marital deductions, charitable deductions, and other corrections (including certain adjustments to DSUE-related returns) that do not impact tax liability on the examined return. Also included are offsetting adjustments that do not result in a change in tax liability. See IRM 4.10.8.2.2.

  2. For an estate tax examination, a No Change with Adjustments case report requires Form 1273, Form 6180 and Form 886-A, for all schedules where changes were made from the amounts and items originally reported. A Publication 3498, The Examination Process, should not be issued to the taxpayer and a Form 890, is not required.

  3. For a gift tax examination, a No Change with Adjustments case report requires a Form 3233 and a Form 886-A for an explanation of each adjustment. A Publication 3498, The Examination Process should be issued with the report.

    • Where the No Change with Adjustments results from a change to the value of a gift reported by the donor, a Form 890 should be obtained, with the signature executed in the adjustment to the applicable credit amount section.

    • Where the No Change with Adjustments results only from changes that affect the DSUE (Deceased Spousal Unused Exclusion) amount available to the donor (and no changes were made to the value of a gift reported by the donor), no Form 890 is obtained.

  4. If the taxpayer does not agree with the adjustments in the No Change with Adjustments case:

    1. Estate Tax: The taxpayer has no statutory rights to contest a determination that does not result in a change to the estate tax liability. Close the case, whether agreed or not, following the closing procedures below at IRM 4.25.10.3, Case Closing Procedures in General, and IRM 4.25.10.4.3, Case Closing Procedures for No Change with Adjustments.

      Note:

      Any change(s) to a Form 706 DSUE election that remains nontaxable after examination will always result in No Change with Adjustments, and there are no appeal rights for such results. See IRM 4.25.10.1.1, Taxpayer Rights, and IRM 4.25.10.2.3, Conclusion of No Change with Adjustments Examination.

      • If the statute of limitations is open under IRC 6501 and on examination the Form 706 with DSUE election becomes taxable, use normal agreed, partially agreed, or unagreed procedures. See IRM 4.25.10.4.4 through 4.25.10.4.6.2.

      • If the return becomes “taxable” but the IRC 6501 statute is not open, use No Change with Adjustments procedures to zero out the DSUE election. See IRM 4.25.10.2.3, and 4.25.10.4.3.

    2. Gift Tax:

      • The taxpayer may contest a legal or valuation determination made with respect to a gift, even without a tax assessment, under IRC 7477. If the taxpayer does not agree to the No Change with Adjustments report, close the case following the procedures below at IRM 4.25.10.2.6, Conclusion of Unagreed Examination, and IRM 4.25.10.4.6, Case Closing Procedures for Unagreed Cases.

      • Where no change to the value of a gift was proposed, but changes were made only to the DSUE amount available to the donor, the taxpayer may not contest the change under IRC 7477. The taxpayer may appeal the findings under IRM 8.1.1.3.2 - No Immediate Tax Consequence Cases.

      • Close the case following the procedures below at IRM 4.25.10.2.6, Conclusion of Unagreed Examination, and IRM 4.25.10.4.6, Case Closing Procedures for Unagreed Cases.

4.25.10.2.4  (02-28-2013)
Conclusion of Agreed Examination

  1. If there is a change in the tax assessment and the case is "agreed", the examiner shall:

    1. Prepare draft Form 1273, Form 6180 and Form 886–A. The report shall explain all changes made during the course of the examination. Form 1273 contains a summary of the adjustments and a computation of the estate tax.

    2. Prepare Form 3233, Report of Gift Tax Examination, in place of Form 1273, if it is a gift tax audit.

    3. Prepare and secure Form 890.

    4. Solicit payment for agreed deficiencies. Compute the interest on the deficiency that will be paid to a date that will afford time for the taxpayer to review the report and submit the payment.

    5. Pursuant to IRC 6631, include language in the cover letter or report that interest calculations made by the examiner are tentative and a final calculation could result in an amount of interest that is more or less than the interest amount calculated by the examiner.

    6. Provide taxpayer with a copy of Publication 3498, The Examination Process. See IRM 4.10.8.1.2.

    7. If payment is received, complete the Form 3244-A – Payment Posting Voucher. Follow the instructions for processing payments on the E&G sharepoint, in the Payment Remittances folder.

      Note:

      Notification must be sent to the Remittance Unit for remittances $1 million or larger.

    8. Close case following time frames set forth in IRM 4.25.1.1.6(4).

  2. Refer to the closing procedures below at IRM 4.25.10.3, Case Closing Procedures in General, and IRM 4.25.10.4.4, Case Closing Procedures for Agreed Cases.

4.25.10.2.5  (02-28-2013)
Conclusion of Partially Agreed Examination

  1. If the taxpayer does not agree to all of the proposed adjustments, but will agree to some of the proposed adjustments, the case is "Partially Agreed." Examiners are encouraged to secure, in unagreed cases, partial agreements.

    1. The examiner will prepare two reports.

    2. Each report must specifically show which adjustments are agreed and which are unagreed. The agreed change in tax must be stated separately from the unagreed change in the tax liability.

    3. The first report, Form 1273 or Form 3233, as applicable, will address the agreed adjustments. Generally, the figures returned by the taxpayer will be reflected in the “Shown on Return” column. The agreed changes will be reflected in the “As Corrected” column. A Form 6180, Forms 886-A and Form 890 should also be included.

      • To complete the agreed report follow procedures at “Conclusion of Agreed Examination” at IRM 4.25.10.2.4(1).

    4. The second report, Form 1273 or Form 3233, as applicable, will show the unagreed changes. Work from the figures agreed upon in your first report in the “Shown on Return” column. The unagreed changes will be reflected in the “As Corrected” column. A Form 6180, Forms 886-A and Form 890 should also be included.

      • To complete the unagreed report, follow the procedures at “Conclusion of Unagreed Examination” at IRM 4.25.10.2.6, below.

    5. Explain the procedure for administrative appeal as well as the option to pay any deficiency and file a claim for refund if the taxpayer or taxpayer’s representative is not knowledgeable regarding these procedures.

    6. To close the partially agreed examination, refer below to IRM 4.25.10.4.5, Case Closing Procedures for Partially Agreed Cases.

4.25.10.2.6  (02-28-2013)
Conclusion of Unagreed Examination

  1. In estate, gift, and generation skipping transfer tax examinations, if the taxpayer does not agree to the proposed adjustments, the case is “unagreed”. The examiner shall:

    1. Solicit a statement of the taxpayer’s position on each unagreed issue. Consider the taxpayer’s position and document the case file before concluding the examination.

    2. Explain the procedure for administrative appeal, as well as the option to pay any deficiency and file a claim for refund if the taxpayer or taxpayer’s representative is not knowledgeable regarding these procedures.

    3. Determine whether case is eligible and should use Fast Track Mediation (FTM), or Fast Track Settlement (FTS) procedures. See IRM 4.25.1.5.15, Fast Track Mediation (FTM), or IRM 4.25.1.5.16 - Fast Track Settlement (FTS).

  2. The examiner, in conjunction with the manager, should then examine and confirm the statute date to determine whether a 30-Day Letter or a Statutory Notice of Deficiency/90-Day Letter should be issued.

    1. If there are more than 210 days remaining on the statute of limitations on the day that the taxpayer communicates disagreement with the proposed adjustments, the manager should consider all the facts and circumstances involved with the return, including but not limited to the following factors, to determine whether a 30-Day Letter should be issued.

      • The time necessary for the examiner to issue the 30-Day Letter, receive the taxpayer’s response, consider that response, and prepare any necessary rebuttal.

      • The likelihood that the taxpayer will request an extension of the initial 30 day response period.

      • A minimum of 30 days for processing the case file to Appeals after review of the response.

      • A minimum of 10 days to account for the time necessary to process the case file from the date of closing by the examiner or paraprofessional to the date the case file is reviewed and closed by the Group Manager.

      • The nature of the disputed issues.

      • The complexity of the facts involved.

      • The applicable legal authorities.

      • The proximity of the statute of limitations and the availability of an extension, if applicable.

    2. If there are less than 210 days remaining on the statute of limitations on the day that the taxpayer communicates disagreement with the proposed adjustments, a Statutory Notice of Deficiency/90 Day Letter must be prepared in accordance with the current procedures set forth in IRM 4.8.9.

  3. In unagreed cases involving an examination of a Form 709 -

    1. Where an increase in value of a gift proposed by the IRS does not generate a gift tax deficiency, examiners should issue a preliminary determination letter using Letter 950-IRC 7477(Letter 950-G).

    2. Where only changes to DSUE are proposed by the IRS (and not changes in value to reported gifts), examiners should issue a preliminary determination letter using Letter 950-F.

  4. The unagreed report is similar in preparation, documentation and information as an agreed report. Report writing procedures are set forth at IRM 4.10.8, Report Writing.

    1. Prepare Form 1273, Report of Estate Tax Examination Changes, Form 6180, Adjustments to Taxable Estate, and Form 886–A, Explanation of Items, for all changed items. Use Form 3233, Report of Gift Tax Examination, for gift tax audits in place of Form 1273.

    2. Because the Appeals Officer relies heavily upon the information set forth in the examiner's report, the unagreed case report should be comprehensive and supported by the law, as applied to the facts of the case. Specifically, the Service’s position must clearly detail the facts and then correctly apply the law. The taxpayer’s position should be set forth in similar detail.

    3. In the report, all significant issues including alternative arguments and whipsaw issues must be raised and discussed. If more than one section of the Code is applicable, all applicable sections should be cited because the further the case proceeds, whether to Appeals or Tax Court, the more difficult it may become for the Service to raise new or alternative issues.

    4. All supporting documents obtained from referral specialists, including financial analyst reports and valuation reports should be included with the report.

    5. Prepare Form 890, Waiver of Restriction on Assessments & Collection of Deficiency & Acceptance of Overassessments.

4.25.10.2.6.1  (02-28-2013)
Preparation of the 30-Day Letter

  1. For the Examiner:

    1. Create a 30-Day Letter Package:

      1. Prepare Letter 950, Letter 950 -F, Letter 950-G, Letter 950-J or Letter 950-K, as appropriate.

        • Address the letter to the taxpayer.

        • Include the taxpayer TIN; if SSN include V or W code).

        • Use the INOLE address unless evidence to the contrary.

        • Include Form number, Tax Period, Telephone Numbers and Last seven digits on your SmartID Card.

        • Person to Contact (Group Manager). Signature Authority is delegated to Group Manager SBSE.

        • Last Date to Respond should be at least 35 days (preferably 37 days) from the anticipated mailing date of the letter.

        • Include the Return Address.

      2. Prepare appropriate Tax Report(s) and waiver(s), if appropriate, based on the tax return under examination.

      3. Complete Letter 937 for the POA (as appropriate, if the Form 2848 or Form 8821 is in the case file or Declaration of Representative on Form 706 is signed).

      4. Prepare Return Envelope without postage. Include your address and notate ’30-Day’ on lower left corner.

      5. Prepare an envelope with the taxpayer’s address.

      6. Prepare an envelope with the POA’s address.

    2. Assemble three packages and Submit to Group Manager.

    1. Package One for Taxpayer:

      • Two copies of Letter 950, Letter 950 -F, Letter 950-G, Letter 950-J or Letter 950-K with Mailing Date left blank for Manager’s signature.

      • Blank Form 13683 – Statement of Disputed Issues.

      • Tax Report(s).

      • If an estate tax or gift tax return (except for DSUE-only changes), Form 890 – Waiver of Restriction on Assessments & Collection of Deficiency & Acceptance of Overassessments, or Form 890 -T – Waiver of Restrictions on Assessment and Collection and Acceptance of Overassessment as to Transferee or Fiduciary Liability for Estate, Gift and Generation - Skipping Transfer Tax.

      • If a fiduciary income tax return, Form 870 – Waiver of Restrictions on Assessment & Collection of Deficiency in Tax & Acceptance of Overassessment.

      • Publication 3498.

      • Return Envelope.

      • Envelope addressed to the taxpayer.

    2. Package Two for POA. If the Form 2848 or Form 8821 is in the case file or if a signed Form 706 Declaration:

      • Letter 937 with a copy of all of the documents included in the taxpayer package.

      • Envelope addressed to the POA.

    3. Package Three for the File:

      • A copy of all documents included in the POA Package.

      • Upload a copy to the Administrative Issue ‘Closing Data’ subfolder.

  2. For the Manager:

    1. Review 30-Day Letter Packages. Review letter, report and waiver for errors, omissions, typos, or other potential problems.

    2. Process 30-Day Letter Taxpayer Package:

      1. Date and sign the Letter 950, Letter 950-F, Letter 950-G, Letter 950-J or Letter 950-K, as indicated below:

        Group Manager Name

        Supervisory Attorney

      2. Stamp or notate the Taxpayer Package Letter 950, Letter 950-F, Letter 950-G, Letter 950-J or Letter 950-K as ‘Original’; the POA Package Letter 950 as ‘Copy’; and the File Package Letter 950 as “File Copy”.

      3. Mail the Taxpayer Package and the POA Package via regular mail. Return the File Copy to the examiner.

  3. Upon issuance of the 30-Day Letter, the taxpayer may request a meeting or telephone conference with the group manager. Also, the taxpayer’s response deadline may change due to an extension request being granted by the group manager.

  4. If the amount of tax and penalties exceeds $25,000, the taxpayer must submit a formal protest. Publication 3498, The Examination Process, details the requirements for filing a written protest.

  5. Upon receipt and review of the written protest, the examiner may determine items in the response need to be addressed and write a rebuttal.

    1. Label the rebuttal "Rebuttal to Protest" and send to the taxpayer as an attachment to a cover letter. Document the case file to note the rebuttal was provided to the taxpayer.

    2. The taxpayer need not be given an opportunity to respond to the rebuttal before sending the case to Appeals. If the Appeals Officer believes that further involvement of Estate & Gift is needed, Appeals will initiate the contact in accordance with the ex parte guidelines. IRM 4.25.1.5.13.

  6. If an agreement is received after the issuance of a 30-Day Letter, the case should be closed using Disposal Code 04. IRM 4.4.1-11.

4.25.10.2.6.2  (02-28-2013)
Preparation of the 90-Day Letter

  1. For cases requiring review and approval of Area Counsel, the 90-Day Letter must be submitted to Area Counsel with at least 60 days remaining on the statute for approval of the 90-Day Letter. Area Counsel will return the case to the referring individual for forwarding to the Technical Services reviewer within 45 days of receipt.

  2. Refer to Notice of Deficiency Procedures for Estate and Gift Tax Cases: A Work Aid, for detailed guidance on 90-Day Letter procedures, requirements, timeframes and model paragraphs.

  3. Assemble three packages and submit to group manager.

    1. Package One for Taxpayer:

      • Two copies of Letter 902 (DO) or Letter 902 (T).

      • Form 3614 -A (Estate Tax) or Form 3615-A (Gift Tax) showing adjustments and revised computation of tax.

      • Form 886 -A, “Explanation of Items.”

      • Form 4089, Notice of Deficiency - Waiver.

      • Notice 1214 – Helpful Contacts for your “Notice of Deficiency.”

    2. Package Two for POA:

      • Letter 937.

      • Copy of all documents included in the Taxpayer Package.

    3. Package Three for the File:

      • Copy of all the documents included in POA Package.

      • Upload a copy of the documents to the Administrative Issue ‘Closing Data’ subfolder.

      Note:

      If the taxpayer pays the full deficiency before the Notice of Deficiency is issued, determine whether a payment or IRC 6603 deposit. See Rev. Proc. 2005-18 for procedures the taxpayer must follow to designate remittance as an IRC 6603 deposit. See IRM 8.20.6.3.3(10/2012).

4.25.10.3  (02-28-2013)
Case Closing Procedures In General

  1. This section provides information on procedures required to close an estate and/or gift tax case, once the examination has been concluded.

4.25.10.3.1  (02-28-2013)
Obtain Necessary IDRS Transcripts (AMDISA, BMFOLT,BMFOLI, and INOLE).

  1. Verify that the correct statute date is reflected on all transcripts. Transcripts should be less than 30 days old, preferably less than one week.

  2. Review transaction codes to ensure that the correct assessed tax is reflected on all Notebook Report Forms.

    • Document 6209 Code Retriever is available on the intranet.

  3. Review transcripts to determine if any of the following need to be addressed on the closing documents:

    • Delinquency Indicator (1) for penalties.

    • MF-TC 96X OR 97X for amended or supplemental returns.

    • MF-TC 34X for 6166 election.

4.25.10.3.2  (02-28-2013)
Items to be Completed Using Notebook Job Aid

  1. Print report with attachments for case file.

  2. Create Form 3198 – Special Handling Notice, in Notebook, and verify auto-populated items. Complete items not auto-populated, deploy and print. Save form in the IMS Administrative Issue ‘Closing Data’ subfolder.

    1. Business Unit Section: Estate or Gift

    2. Employee Preparing Form Section: Primary Business Code (213); Secondary Business Code (below, or see Document 6036); Group Number (1XXX); Employee ID/Badge No.: Last 7 digits on your SmartID Card; Taxpayer Identification Number (TIN) and Earliest Statute Date.

      Note:

      Secondary Business Codes are:

      • Northeast - 91700

      • East - 91900

      • Central - 92300

      • West - 92500

    3. Taxpayer Name Section

      1. Use the INOLE address unless you have evidence to the contrary.

      2. If the address for the case file has been changed (see Form 8822), complete the Form 2363 – Master File Entity Change and fax to Closed Case Processing (CCP). Use the Address Change (fax coversheet) or see Miscellaneous IDRS Inputs. Include original Form 2363 and fax confirmation in the case file.

      3. Check Power of Attorney (POA) and enter valid period(s) if the Form 2848 – Power of Attorney and Declaration of Representative or Form 8821 – Tax Information Authorization is in the case file or if Form 706 Declaration is signed.

    4. Related taxpayers or Key Cases Section: Enter the taxpayer name, TIN, MFT, and Tax Period as appropriate.

    5. Expedite Processing Section:

      1. Select if the statute is less than 90 days.

      2. Select if IRC 6166 election was made and is valid.

      3. Select if agreed and unpaid deficiency over $100,000.

    6. Special Features Section: Complete as appropriate.

      1. If IDRS printouts show a 96X or 97X, or an amended return is in the file, the return should be reviewed and the amended return box should be checked.

      2. If IDRS printouts show a delinquency indicator of “1”, check “Other Instructions” box, write “Delq Ind 1”, and address whether penalties were applied.

    7. Forward Section:

      1. Check ‘Forward to PSP’ if a Fed/State, research or project case, or if otherwise directed to in case assignment instructions (e.g. Form 8939 examinations).

        Note:

        Refer to Exhibit 4.25.10-1 for Tracking Codes for project returns to be forwarded to PSP.

      2. Check ‘Forward to Tech Services’ if case is unagreed.

      3. Check ‘Forward to CCP’ for all other cases.

      4. Complete ‘Date Closed to Manager’ and ‘Manager’s Name’.

    8. Complete Return information as appropriate:

      1. Tax Period (YYYYMM if 709; DOD if 706),

      2. MFT (51 if 709; 52 if 706; 05 if 1041)

      3. Time Applied (include all time from other team members and specialists, do not include time charged to Activity Code 615)

      4. Disposal Code:

        01 - No Change with Adjustments

        02 - No Change no Adjustments

        03 - Agreed

        04 - Agreed After 30-Day Letter

        07 - Protested to Appeals (30-Day Letter)

        08 - Unagreed (90-Day Letter)

        32 - Surveyed After Assignment

        Note:

        For full list of disposal codes, see IRM Exhibit 4.4.1-11, Disposal Codes.

      5. Tax Deficiency, if any

      6. Penalty Code Section and Amount, if any

      7. Agreement Date, if any

      8. Payment Y/N

    9. Letter Instructions for CCP Section:

      1. Check box for ‘Copy to POA -Letter 937’ if Form 2848 or Form 8821 is in the case file, or if Form 706 Declaration is signed.

      2. Check box at “Other Instructions” and provide POA name and address.

      3. Refer to Closing Procedures by Type of Closure below for further instructions.

  3. Create Form 5346, Examination Information Report, if reported non-professional executor fees are $10,000 or over.

    1. Upload form to the IMS Administrative Issue ‘Closing Data’ subfolder.

    2. Attach a copy of the Form 5346 and Form 4421 – Declarations – Executor Commissioner’s and Attorney’s Fees to the Schedule J Issue Lead Sheet.

    3. Staple a copy of the Form 5346 along with a copy of the Form 4421 and a copy of the first three pages of the return. Place in file.

      • The group manager should ensure that the Form 5346/4421 package is routed to the address listed on the E & G sharepoint, at Executor Fees folder.

  4. Create a 6166 Lien Package if there is a valid IRC 6166 Installment Payment election. Refer to IRM 4.25.1.5.12 for guidance.

  5. Create a 2032A Lien Package if there is a valid IRC 2032A Special Use Valuation election. Refer to IRM 4.25.1.5.6 for guidance.

  6. Close the Case in Notebook.

4.25.10.3.3  (02-28-2013)
Items to be Uploaded and Completed in IMS

  1. Verify All Issues Have a UIL Code in IMS. A UIL code for each issue is required to close the case.

  2. Verify taxpayer information and the taxpayer’s representative information has been input in IMS.

  3. Complete Form 9984, Examining Officer’s Activity Record, in IMS.

    • Include dated entries every 45 days or less with substantive actions and explanations for delays and gaps fully documented.

    • Verify inclusion of the examination start date, which should be within 45 days of assignment. Explain delay, if applicable.

    • Verify inclusion of opening letter mailing date which should be within 45 days of first action. Explain if not timely mailed.

    • Notate whether the taxpayer was provided Publication 1 and Notice 609 upon initial contact.

    • Notate the date the draft report was issued. Confirm a Publication 3498 was issued if the closed case is any of the following types: See IRM 4.25.10.1.1 (2)(a).

    • If a No Change No Adjustments report was issued, confirm “NO CHANGE SUBJECT TO CHIEF, ESTATE AND GIFT TAX APPROVAL” language was included.

    • Regarding overall examination: Ensure that you have notated and explained any delays, causes of delays, and whether or not delays were communicated to any of the affected parties (explain any lack of communication).

  4. Confirm all Workpapers, Closing Documents, and Tax Return Data have been uploaded to the Administrative Issue subfolders as follows (one sub-folder within each of the following subfolders may be created):

    • Admin Forms: Examination Process and Documentation (EPD) Mandatory Forms and Lead Sheets, Correspondence, other Examination Workpapers, and Documents and Information provided by the taxpayer that relate to disputed or unagreed issues. All lead sheets and workpapers from Notebook should be uploaded to IMS at the beginning of the examination and worked on in IMS.

    • Closing Data: Upload All Notebook Closing Documents and Report Forms, and the case’s XML file or zip file, as appropriate. (See the Notebook folder ‘Deployed Form/TP/Report Forms’.) Scan and upload the signed Waiver, Form 890, if any.

    • Tax Return Data: Limited to return information such as scanned returns.

      For instructions regarding the deployment of Notebook Closing Reports and Forms, see the Notebook Manual, accessible from within the Notebook Job Aid.

  5. Create a Form 5344 – Examination Closing Record in IMS and verify auto-populated items. Complete items not auto-populated and print.

    1. P1-P6: Usually “E”. Auto-populated but verify

    2. P7-34: Auto populated but verify

    3. Item 8: Enter Agreement Date

    4. Item 12: Tax, Penalty and Interest Adjustments:

      • Deficiency: Trans. Code 300 and amount of deficiency

      • Over-assessment: Trans. Code 301 and amount of refund

      • Penalties applied: Trans. Code 160 and amount of penalty

      • Penalties abated: Trans. Code 161 and amount abated

        Note:

        If IDRS shows a delinquency indicator “1”, Trans. Code 160 must be input in Item 12, even if amount is zero.

    5. Item 13: Enter disposal code (See IRM 4.25.10.3.2(2)(h)(4), above).

    6. Item 15: Trans. Code “076” for Estate or “077” for Gift Cases and amount of deficiency or zero for no-change.

    7. Item 28: Examiner’s time: auto-populated but verify time includes all team members and specialists.

    8. Item 30: Examination Technique Code will always be 3 (three).

    9. Item 31: Examiner’s Grade: auto-populated but verify.

    10. Item 33: Examiner’s Name: auto-populated but verify.

    11. Item 408: Enter “P” if primary return, or “S” if related return.

    12. Item 410: Enter Aging Reason Code (See IRM 4.25.1.6).

    13. Item 411: Circle type of payment.

    14. Item 412: Circle “I” if Installment Agreement, otherwise circle “N”.

      • For specific instructions on completing the Form 5344 depending on type of closure, see IRM 4.25.10.4.1 through 4.25.10.4.6.

      • For manual completion instructions, see IRM 4.4.12 and the IMS Manual, located on the Estate and Gift sharepoint, in the IMS and Notebook Resources folder.

  6. Close the Case in IMS.

    1. Synchronize the case to upload and download all files.

    2. Check in all workpapers/documents.

    3. Enter actual closed dates for the case and for each entity.

    4. Access the Case Inventory screen to change the case status to ‘closed’.

      • If the closing is successful, a message providing ‘Case data will be removed from your case inventory’ will appear. The case will no longer be in your Case Inventory.

4.25.10.3.4  (02-28-2013)
Case File Assembly

  1. Verify the tax return is complete and intact, as originally filed.

  2. The Classification Sheet or a copy of the classification folder that contains classification data for the case must be included in the closed file.

  3. Assemble Required EPD Documents and Workpapers using the EPD tabs (Document 12555). EPD tabs are required.

    1. If a Limited Scope Examination (Project Code 0902) and the Limited Scope Examination Planning and Work Papers Lead Sheet is used then the only additional lead sheet required is the Form 9984 – Examination Officer’s Activity Record. If the Limited Scope Examination Lead Sheet is not used then all of the following mandatory lead sheets must be included in the case file.

    2. Examination Planning Workpapers Index

      • Mandatory.

        1. The Mutual Commitment Date (MCD) should be included or an explanation should be provided if it is not.

        2. Complete all applicable Representative Fields.

        3. Complete Penalty and Fraud Fields. Document penalty consideration including the non-assertion of penalties.

        4. Check appropriate boxes for issues considered.

    3. Statute Verification Lead Sheet

      • Mandatory.

    4. Administrative Lead Sheet

      • Mandatory.

        1. Complete the Taxpayer Rights area as appropriate.

        2. Indicate relevant referrals and dates.

        3. Complete Statute Controls area. If a viable statute of limitations exists and the return is not opened for examination; explain why it has not been opened.

        4. Complete Form 872 – Consent to Extend the Time to Assess Tax section, as appropriate.

        5. Complete Payment section if relevant.

    5. Other Tax Returns Lead Sheet

      • Mandatory.

        1. Identify Related Returns and include determination regarding whether the audit was expanded to include those returns.

        2. Submit income tax referrals to PSP, if applicable. See IRM 4.25.10.3.2 (2), above.

    6. Asset Probe and Consistency Lead Sheet

      • Mandatory.

    7. Form 9984 – Examining Officer’s Activity Record in IMS

      • Mandatory.

    8. Manager Plan to Close Lead Sheet

      1. Include for all cases in process for more than 120 days.

    9. Issue Lead Sheets

      • Mandatory.

        1. Identify which audit steps were used by entering the appropriate workpaper reference.

        2. List the pertinent facts.

        3. Cite the relevant code section(s) and/or case law upon which your analysis and determination is based.

        4. State the government’s and taxpayer’s positions.

    10. Penalty Lead Sheets and Penalty Approval Form

      1. Include if penalties are proposed for assessment.

      2. Address the non-assertion of penalties on the Examination Planning Workpapers Index.

    11. Installment Payment Election Lead Sheet

      1. Mandatory if an IRC 6166 election was made.

      2. Document your IRC 6166 determination on the Administrative Lead Sheet and on the Form 9984.

      3. Include a detailed explanation of your determination.

  4. Add the Form 10364 -A – Statute Expiration Case Notice, and/or Form 895 – Notice of Statute Expiration from Notebook, as appropriate.

    • If the statute is within 210 days, complete Form 10364-A (red folder or red sheet).

    • If the statute is 6 months or less, complete Forms 10364-A and 895.

    • Some groups may generate the Form 895 from ERCS and forward to the examiner for acknowledgement.

  5. Refer to Exhibit 4.25.10-2 for Case File Assembly.

4.25.10.4  (02-28-2013)
Case Closing Procedures by Type of Closure

  1. This section provides detailed closing information for estate and/or gift tax cases, based on the type of closure.

4.25.10.4.1  (02-28-2013)
Case Closing Procedures for Survey After Assignment

  1. Survey After Assignment – Not a Claim

    1. Complete Form 3187 – Survey After Assignment and attach to case file. See IRM 4.25.10.2.1, Conclusion of Survey After Assignment.

    2. Complete Form 5351 – Examination Non-Examined Closings. Use the Status- EGC label if available. If the label is not available, enter the TIN, MFT, Tax Period, Name Control (usually first four letters of last name), and Enter Requester/EGC/Date in the area provided at the top of the form.

    3. Create and complete Form 3198. Refer to IRM 4.25.10.3.2 (2), except for the differences noted below:

      • Forward Section: Use Disposal Code 32.

      • Letter Instructions for CCP:

        706 – Check box ‘Estate Tax Closing Letter 627’

        709 – Check box ‘No Letter required to be sent by CCP’

    4. Stamp ‘Survey After Assignment’ Stamp on the Face of the Return. Sign, date, and forward to your manager for signature.

  2. Survey After Assignment – Claim

    1. Complete steps in Section (1), Survey After Assignment, except for the differences noted below.

    2. Do not use Form 5351.

    3. Create and complete Form 3198. Refer to IRM 4.25.10.3.2 (2), except for the differences noted below:

      • Special Features Section: Check the box for ‘Surveyed Claim’.

      • Forward Section: Use Disposal Code 34.

      • Letter Instructions for CCP:

        706 – Check box ‘Estate Tax Closing Letter 627’

        709 – Check box ‘No Letter required to be sent by CCP’

    4. Create and complete Form 5344. Refer to IRM 4.25.10.3.3(5), except for the differences noted below:

      • Item 13: Enter disposal code 34

      • Item 21: Enter the amount claimed

      • Item 22: Enter 0 (zero)

      • Item 23: Hours worked on claim

      • Item 24: Enter claim type, B for Form 843 – Claim for Refund and Request for Abatement, or Z for any other claims.

      • Item 28: Hours worked on non-claim issues

    5. Stamp ‘Survey After Assignment’ Stamp on the Face of the Claim. Do Not stamp the original return. Sign, date, and forward to your Manager for signature.

4.25.10.4.2  (02-28-2013)
Case Closing Procedures for No Change No Adjustments

  1. Follow items in IRM 4.25.10.3, Case Closing Procedures In General, except for the differences noted below.

    1. Create and complete Form 3198. Refer to IRM 4.25.10.3.2 (2), except for the differences noted below:

      • Forward Section: Use Disposal Code 02.

      • Letter Instructions for CCP:

        706 – Check box ‘No Change Letters: Letter 590’

        706 – Check box ‘Estate Tax Closing Letter 627’

        709 – Check box ‘No Letter required to be sent by CCP’

    2. Create and complete Form 5344. Refer to IRM 4.25.10.3.3(5), except for the differences noted below:

      • Item 12: Trans. Code “300” and zero in the amount column

      • Item 12: Trans. Code “160” and zero in amount column (if Delq. Ind. “1”)

      • Item 13: Enter disposal code 02.

      • Item 15: Trans. Code “076” for Estate or “077” for Gift Cases and zero in amount column.

4.25.10.4.3  (02-28-2013)
Case Closing Procedures for No Change with Adjustments

  1. Follow items in IRM 4.25.10.3, Case Closing Procedures In General, except for the differences noted below.

    1. Create and complete Form 3198. Refer to IRM 4.25.10.3.2 (2), except for the differences noted below:

      • Forward Section: Use Disposal Code 01.

      • Letter Instructions for CCP:

        706 – Check box ‘No Change Letters: Letter 1156’

        706 – Check box ‘Estate Tax Closing Letter 627’

        709 – Check box ‘No Letter required to be sent by CCP’

    2. Create and complete Form 5344. Refer to IRM 4.25.10.3.3(5), except for the differences noted below:

      • Item 12: Trans. Code “300” and zero in the amount column

      • Item 12: Trans. Code “160” and zero in amount column (if Delq. Ind. “1”)

      • Item 13: Enter disposal code 01.

      • Item 15: Trans. Code “076” for Estate or “077” for Gift Cases and zero in amount column.

      • Item 422: Enter dollar amount of applicable credit adjustment

    Note:

    No Change with Adjustments cases should be closed using Disposal Code 01, whether or not a Form 890 (waiver) is secured. Disposal Code 03 should not be used for No Change with Adjustments cases unless special Delinquent Return procedures apply.

4.25.10.4.4  (02-28-2013)
Case Closing Procedures for Agreed Cases

  1. Follow items in IRM 4.25.10.3, Case Closing Procedures In General, except for the differences noted below.

    1. Create and complete Form 3198. Refer to IRM 4.25.10.3.2 (2), except for the differences noted below:

      • Forward Section: Use Disposal Code 03.

      • Letter Instructions for CCP:

        706 – Check box ‘Estate Tax Closing Letter 627’

        709 – Check box ‘No Letter required to be sent by CCP’

    2. Create and complete Form 5344. Refer to IRM 4.25.10.3.3(5), except for the differences noted below:

      • Item 12: Trans. Code “300” and deficiency in the amount column

      • Item 12: Trans. Code “160” and penalty in amount column (if Delq. Ind. “1”, must be input, even if zero)

      • Item 13: Enter disposal code 03.

      • Item 15: Trans. Code “076” for Estate or “077” for Gift Cases and deficiency in amount column.

4.25.10.4.5  (02-28-2013)
Case Closing Procedures for Partially Agreed Cases

  1. A partially agreed case contains at least one agreed issue and at least one unagreed issue. The examiner must complete two reports. (See instructions at IRM 4.25.10.2.5.) To close the partially agreed case, the agreed report must be processed first, and the unagreed case procedures apply to the remaining issues.

  2. The examiner should complete the following:

    1. For the agreed report:

      1. Create and complete Form 3198. Refer to IRM 4.25.10.3.2 (2), except for the differences noted below:

        • Special Features Section: Check the box for ‘Partial Assessment Requested’.

        • Other Instructions Section: "Return via fax when completed."

        • Forward Section: Use Disposal Code 03

        • Tax Deficiency: Agreed amount only

        • Penalties: If applicable, for agreed amount only

        • Letter Instructions for CCP: No letter required to be sent by CCP.

      2. Create and complete Form 5344. Refer to IRM 4.25.10.3.3(5), except for the differences noted below:

        • Write "Partial Agreement – Agreed Portion" in the top center margin.

        • Item P1-6: Select “F” for Partial closure

        • Item 12: Trans. Code “300” and agreed deficiency in the amount column

        • Item 12: Trans. Code “160” and agreed penalty in amount column (if Delq. Ind. “1”, must be input, even if zero)

        • Item 13: Enter disposal code 03.

        • Item 15: Trans. Code “076” for Estate or “077” for Gift Cases and agreed deficiency in amount column.

    2. For the unagreed report:

      1. Create and complete Form 3198. Refer to IRM 4.25.10.3.2 (2), except for the differences noted below:

        • Special Features Section: Check the box for ‘Partial Assessment Requested’.

        • Other Instructions Section: Write in “Final Closure – partial assessment previously completed”.

        • Forward Section: Forward to Tech Services

        • Disposal Code: 08

        • Tax Deficiency: Unagreed amount only

        • Penalties: If applicable, for Unagreed amount only

        • Letter Instructions for CCP: No letter required to be sent by CCP.

      2. Create and complete Form 5344. Refer to IRM 4.25.10.3.3(5), except for the differences noted below:

        • Item P1-6: Select “F” for Partial closure

        • Item 12: Trans. Code “300” and enter only the unagreed increase or decrease after the processing of the partial assessment in the amount column.

        • Item 12: Trans. Code “160” and unagreed penalty in amount column (if Delq. Ind. “1”, must be input, even if zero)

        • Item 13: Enter disposal code 08.

        • Item 15: Trans. Code “076” for Estate or “077” for Gift cases and the unagreed deficiency amount.

  3. The agreed portion must be assessed prior to closing the unagreed case. Fax the following to CCP to get the partial agreement assessed:

    • FAX cover should state “Partial Assessment Request”

    • Pages 1 and 2 of the return with an IMFOLT transcript

    • “Agreed” Report (RAR) – Partial Assessment (see IRM 4.25.10.2.5 (1)(c))

    • Signed Waiver (Form 890)

    • Form 3198 completed for the “Agreed” Report (see IRM 4.25.10.4.5 (2)(a)(1))

    • Form 5344 completed for the “Agreed” Report (Disposal Code 03) (see IRM 4.25.10.4.5 (2)(a)(2)).

      • Penalty amounts should be computed and included on the Form 5344.

      Note:

      Do NOT update case status to “51”

      • CCP will stamp the Form 5344 “Request Completed” and FAX a copy back to the group. Retain the copy in the case file.

  4. After receipt of the “Request Completed” Form 5344 fax from CCP, prepare the unagreed portion of the case for closure to Tech Services. Include the following:

    • “Unagreed” Report (RAR) (see IRM 4.25.10.2.5 (1)(d))

    • Form 3198 completed for the “Unagreed” Report (see IRM 4.25.10.4.5 (2)(b)(1))

    • Form 5344 completed for the “Unagreed” Report (see IRM 4.25.10.4.5. (2)(b)(2))

4.25.10.4.6  (02-28-2013)
Case Closing Procedures for Unagreed Cases

  1. This section provides information on closing unagreed 30-Day Letter and Statutory Notice of Deficiency (90-Day Letter) cases.

4.25.10.4.6.1  (02-28-2013)
Unagreed – 30-Day Letter

  1. Create and complete Form 3198. Refer to IRM 4.25.10.3.2 (2), except for the differences noted below:

    • Forward to Technical Services Section: Check the box for ‘Unagreed to Appeals’.

    • Forward Section: Check Box ‘Forward to Tech Services’

    • Disposal Code 07

    • Letter Instructions for CCP:

      706 – Leave blank

      709 – Leave blank

  2. Create and complete Form 5344. Refer to IRM 4.25.10.3.3(5), except for the differences noted below:

    • Item 12: Trans. Code “300” and deficiency in the amount column

    • Item 12: Trans. Code “160” in amount column (if Delq. Ind. “1”)

    • Item 13: Enter disposal code 07.

    • Item 15: Trans. Code “076” for Estate or “077” for Gift Cases and in amount column.

    • Item 422: Enter dollar amount of Applicable Credit Adjustment

4.25.10.4.6.2  (02-28-2013)
Statutory Notice of Deficiency/90-Day Letter

  1. Create and complete Form 3198. Refer to IRM 4.25.10.3.2 (2), except for the differences noted below:

    • Forward to Technical Services Section: Check the box for ‘Unagreed for Statutory Notice’.

    • Forward to Technical Services Section: If a claim disallowance (full or partial), Check ‘Statutory Notice of Claim Disallowance - Letters 905 and 906’.

    • Forward Section: Check Box ‘Forward to Tech Services’

    • Disposal Code 08

    • Letter Instructions for CCP:

      706 – Leave blank

      709 – Leave blank

  2. Create and complete Form 5344. Refer to IRM 4.25.10.3.3(5), except for the differences noted below:

    • Item 12: Trans. Code “300” and in the amount column

    • Item 12: Trans. Code “160” and zero in amount column (if Delq. Ind. “1”)

    • Item 13: Enter disposal code 08.

    • Item 15: Trans. Code “076” for Estate or “077” for Gift Cases and in amount column.

Exhibit 4.25.10-1 
Tracking Codes for Project Returns to be Forwarded to PSP

Research Projects:

  • 6411 - Estate Non-Filer Research Project Phase III

  • 7730 - Estate Non-Filer Research Project

  • 7731 - Gift Non-Filer (Trust) Research Project

  • 7733 - Non-Filer (Referral/Informants) (SEC Insider Transfers)

  • 9506 - Gift Non-Compliance (Erroneous Total Taxable Gifts) (Line 3 Error, Underreporting)

Fed/State:

  • 7523 - Real Estate Gift Tax Non-Filer Compliance Initiative Project (CIP)

CIPs:

  • 6123 - Offshore Voluntary Disclosure (UBS)

  • 6302 - Fed/Fed SEC Form 5 CIP

  • 6426 - Offshore UBS Treaty

  • 6458 - Estate Non-Filer 706 GS

Exhibit 4.25.10-2 
Case Assembly (also available in Notebook)

  1. Forms affixed to outside of case folder, top to bottom:

    1. Form 3210 – Document Transmittal

    2. Form 895 – Notice of Statute Expiration, placed on top of all other papers

    3. Form 10364-A – Statute Expiration Case Notice - staple to front cover of case file

    4. Form 3198 – Special Handling Notice - staple to front cover of case file

  2. Forms attached to left inside of case folder:

    1. Copy of Form 9984 – Examining Officer’s Activity Record

    2. Address change sheets—Forms 8822, 2363, and fax confirmation, if applicable

    3. Form 5346 – Examination Information Report, Form 4421, and a copy of the first three pages of the Form 706

  3. Forms and other documents enclosed in case folder:

    1. Current transcripts, preferably generated within 1 week of the date of submission

    2. Waiver and acceptance forms:

      • Form 890 – Waiver of Restrictions on Assessment and Collection of Deficiency in Tax and Acceptance of Overassessment

      • Form 2297– Waiver of Statutory Notification of Claim Disallowance

      • Form 3363 – Acceptance of Proposed Disallowance of Claim for Refund or Credit

    3. Taxpayer’s protest and correspondence in unagreed cases

    4. Examination report, with appropriate letters for unagreed cases

    5. Original tax return(s) and related attachments (See Item 4 below)

    6. Form 5546 – Examination Charge-Out (attached to the back of the return)

    7. Examination Planning and Workpaper Index

    8. Workpapers, Correspondence, and Exhibits—following the order of the index

  4. Forms and documents to be attached to the tax return in the following order:

    1. Form 5344 – Examination Closing Record

    2. Form 3187 – Survey After Assignment Form

    3. Form 3244-A, Payment Posting Voucher Examination (part 2 stapled to the face of the return)

    4. Statute extension forms: An executed copy should be stapled to the reverser of the first page of the tax return on top of any other attached forms

      • Form 872 – Consent to Extend the Time to Assess Tax; and/or

      • Form 872-A, Special Consent to Extend the Time to Assess Tax

    5. Form 56 – Notice concerning Fiduciary Relationship, with CAF fax confirmation, stapled to the reverse of the first page of the tax return

    6. Form 2848 – Power of Attorney, and/or Form 8821, Tax Information Authorization, with CAF fax confirmation(s), stapled to the reverse of the first page of the tax return

    7. Form 843 – Claim for Refund and Request for Abatement or Amended Returns & Informal Claims

    8. Substitute For Return (SFR). If applicable, staple Form 13496 – IRC 6020(b) Certification to the face of the SFR. See additional requirements for SFR/Non-Filer closures in the Delinquent SFR Policies folder on the E&G sharepoint.

    9. Photocopy of all requests (e.g., Forms 5345-D, 5354) using the following source code must be attached to the return being closed as a permanent record

      • Source Code 45 - reference and information return

Exhibit 4.25.10-3 
Closing Letters

Signature authority located in IRM 4.25.1.5.5.

  • Letter 627 - Estate Tax Closing Letter

  • Letter 569 (DO) - Claim Disallowance Letter

  • Letter 590 - No-Change Final Letter

  • Letter 902 - Notice of Deficiency

  • Letter 937 - Transmittal Letter for Power of Attorney

  • Letter 950 - Unagreed, straight deficiency, straight overassessment or mixed deficiency and overassessment

  • Letter 950-F - Appeals Request for Change/No-Change Cases

  • Letter 950-G - Contact Letter to Explain Appeals Rights Per IRC 7477

  • Letter 950-H - 30-Day Letter - Intent to Terminate IRC §6166 Election

  • Letter 950-I - 30-Day Letter - Intent to Terminate IRC §6166 Election


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