4.71.7  Survey Returns

Manual Transmittal

July 15, 2013

Purpose

(1) This transmits revised IRM 4.71.7, Employee Plans Examination of Returns - Survey Returns.

Background

IRM 4.71.7 contains procedures for surveying EP examinations of Forms 5500, 5330, 990-T and 1040/1120 discrepancy adjustments.

IRM 4.71.7 does not contain procedures for surveying Non-Return Units (NRU). Survey of NRU are covered under IRM 4.71.17.

IRM 4.71.7 does not contain procedures for surveying claims. Survey of claims are covered under IRM 4.71.8.

Material Changes

(1) The sole change to this IRM is to change the link to the exhibit.

(2) Exhibits have been revised to use the most current version of forms and letters. Forms and letters are listed as Exhibits in the My Resources section of TE/GE Connect under IRM 4.71 - Employee Plans Examination Exhibits.

Effect on Other Documents

This supersedes IRM 4.71.7 dated January 13, 2012.

Audience

TEGE (Employee Plans)

Effective Date

(07-15-2013)


Robert Choi
Director, Employee Plans
Tax Exempt and Government Entities Division

4.71.7.1  (07-15-2013)
Survey Returns

  1. Under certain circumstances, a group may make the determination to not examine a return initially selected for examination. These cases may be closed by survey.

  2. After appropriate coordination with EP Classification and their Area Manager, group managers may survey a return, before or after assignment if no examination is warranted or if the number of returns assigned to the group exceeds the number that can be examined and processed in a timely manner.

  3. With proper approval, returns selected for examination may be surveyed:

    1. Anytime prior to assignment to an agent, or

    2. After assignment to an agent, but before receipt of plan records.

      Note:

      Once records are received or reviewed, the return may not be surveyed. The examination procedures in the other sections of IRM 4.71 must be followed.

  4. The following types of returns are eligible to be closed by survey:

    1. Form 5500 series returns,

    2. Form 1040/1120 discrepancy adjustments,

    3. Form 5330 returns, and

    4. Form 990-T returns.

  5. There are two types of surveys:

    1. Survey before assignment, and

    2. Survey after assignment.

  6. Form 5596, TE/GE Non-Examined Closings, is used for all TE/GE non-examined closings.

  7. When surveying a return that was established as a result of a referral from another governmental entity or another division within IRS, care should be taken to ensure that notification of the survey to the referring entity is made in a timely manner as specified in IRM 4.71.6.

4.71.7.2  (07-15-2013)
Survey Before Assignment

  1. Any return closed from an EP group before assignment to an agent and before contact with the taxpayer is considered surveyed before assignment.

  2. Returns surveyed before assignment are closed with disposal code 31.

  3. Form 5596 must be completed to reflect the EIN, MFT, Plan Number, Year, Taxpayer Name, and the appropriate AIMS non-examined disposal code.

  4. When surveying a return that was established as a result of a referral from another governmental entity or another division within IRS, a written explanation should be reflected on or attached to the referral form. The referral form should be forwarded to EP Classification at the following address:

    IRS - EP Classification

    9350 Flair Drive, 2nd Floor

    El Monte, California 91731-2885

4.71.7.3  (07-15-2013)
Survey After Assignment

  1. To allow Area offices flexibility in managing workload, under certain circumstances, cases may be surveyed after assignment even though initial contact was made by the agent, if no records were received.

  2. If records were solicited and received, the case may not be surveyed.

  3. A return may be surveyed after assignment if the agent has not contacted the taxpayer, and after consultation with the group manager, they believe an examination would result in no material change in tax liability or the plan's qualified status.

  4. Use Form 1900, Income Tax Survey After Assignment, for all returns surveyed after assignment to explain the reasons for the survey action (this is especially important for referrals).

    Note:

    When surveying a Form 5500, write in "5500" at the top of the form. See IRM 4.71.7 Exhibit 2 at IRM 4.71 - Employee Plans Examination Exhibits for an example of a completed Form 1900.

  5. Form 5596 should be completed to reflect the EIN, MFT, Plan Number, Year, Taxpayer Name, and disposal code 32 (Surveyed After Assignment). See IRM 4.71.7 Exhibit 1 at IRM 4.71 - Employee Plans Examination Exhibits for an example of a completed Form 5596.

  6. When surveying a case after contact has been made with the taxpayer (but no records were received), use Letter 1024-A to notify the taxpayer the case is closed. See IRM 4.71.7 Exhibit 3 at IRM 4.71 - Employee Plans Examination Exhibits for an example of Letter 1024-A.

    Note:

    Letter 1024-A will be prepared by the agent and mailed by the designated person in the group.

  7. When surveying a return that was established as a result of a referral from another governmental entity or another division within IRS, a written explanation should be reflected on the referral form or attached to it. The referral form should be forwarded to EP Classification at the following address:

    IRS - EP Classification

    9350 Flair Drive, 2nd Floor

    El Monte, California 91731-2885

4.71.7.4  (07-15-2013)
Case Closing

  1. Surveys of returns no longer require a paper file as RCCMS has been enhanced to process the closing action directly to AIMS.

  2. If the group manager and agent elect to process a survey as a completely electronic file:

    1. A notation should be made in the Message screen and in the Compliance screen in RCCMS that the case is fully electronic.

    2. Form 3210, Document Transmittal, annotated "electronic closure" , should be faxed to Examinations Special Support and Processing (ESSP or EP Closing Unit) at 718-834-6521.

  3. If the manager and agent elect to not process a survey as a completely electronic file, printed paper copies of the following documents must be included in the case file when the case is closed from the group to ESSP:

    1. Form 5596, and

    2. The return being surveyed.

      Note:

      Any surveyed return will be stamped with a "Closed Survey After Assignment" stamp or a "Closed Survey Before Assignment" and must be signed by the agent and the group manager approving the survey. Do not stamp an original filed return; instead make a copy of any original return and stamp the copy.

  4. Prepare and save Form 5596 in the RCCMS Office Documents folder using the RCCMS Naming Convention.

  5. If the case was assigned to an agent, make sure Form 1900 was prepared, electronically signed and saved in the RCCMS Office Documents folder using the RCCMS Naming Convention.

  6. When closing the case in RCCMS:

    1. Make sure the "Survey Reason Code" is completed in the closing tab in RCCMS.

    2. Make sure disposal code 908 is entered for a "Survey After Assignment" .

    3. Make sure disposal code 910 is entered for a "Survey Before Assignment" .

  7. Prepare and mail Letter 1024-A if contact was made with the taxpayer.

    Note:

    Letter 1024-A will be prepared by the agent and mailed out by the designated person in the group.

  8. Save copies of all forms and letters generated by the agent in the RCCMS Office Documents folder using the RCCMS Naming Convention.

  9. Update the status code to 51 on RCCMS and AIMS when the case is closed from the group.

  10. Close the case file and RCCMS record to ESSP.


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