4.71.8  EP Claims

Manual Transmittal

October 15, 2012

Purpose

(1) This transmits revised IRM 4.71.8, Employee Plans Examination of Returns, EP Claims.

Material Changes

(1) No material changes have been made to this IRM. Only minor editorial changes have been made.

Effect on Other Documents

This supersedes IRM 4.71.8 dated May 10, 2011.

Audience

TEGE, Employee Plans

Effective Date

(10-15-2012)


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

4.71.8.1  (10-15-2012)
Claims and Miscellaneous Procedures for Case Processing

  1. The following section provides guidance on claims and miscellaneous procedures for the following topics:

    1. Claims, including claims that are surveyed, claims allowed in full, and partial or full claim disallowance.

    2. Collection of deficiencies and installment agreements.

    3. Interest abatement of claims.

4.71.8.2  (10-15-2012)
Claim for Refund

  1. A claim is a request for a refund or abatement of tax and/or penalties previously assessed. A claim can be filed in various forms, such as:

    1. Form 843, Claim for Refund and Request for Abatement

      Note:

      See IRM 4.71.8 Exhibit 1 at Employee Plans IRM Exhibits for an example of a completed Form 843.

    2. Form 1040X, Amended U.S. Individual Income Tax Return

    3. Form 1045, Application for Tentative Refund

    4. Form 1120X, Amended U.S. Corporation Income Tax Return

    5. Form 1139, Corporation Application for Tentative Refund

    6. Amended Form 5330, Return of Excise Taxes Related to Employee Benefit Plans

    7. Form 990-T, Exempt Organization Business Income Tax Return, showing a decrease in tax liability.

  2. A claim may also be in the form of a letter or other document that contains all facts necessary to decide that a reduction in tax liability is involved.

    1. This is referred to as an informal claim.

    2. An informal claim must be in writing.

  3. In EP, claims are generally filed for:

    1. Form 5330

    2. Form 990-T

    3. Form 1040, U.S. Individual Income Tax Return, on a discrepancy adjustment case

    4. Form 1120, U.S. Corporation Income Tax Return, on a discrepancy adjustment case.

4.71.8.3  (10-15-2012)
Statute of Limitations for Claims

  1. According to IRC 6511(a), a claim must be filed before the later of:

    1. Three years from the date on which the return was filed, or

    2. Two years from the date on which the tax was paid.

  2. The filing of a claim for refund keeps the statute open only with respect to the claim.

    1. If other issues exist and the statute on the original return is about to expire, a statute extension should be secured for the return on which the claim is based.

    2. If the statute of limitations has expired, adjustments to the return may be made only up to the amount of the claim.

  3. The statute of limitations for filing a claim is suspended under certain circumstances:

    1. If a taxpayer makes a credible claim that he/she is unable to manage his/her financial affairs by reason of a medically determinable physical or mental impairment (e.g., "financially disabled" ) as defined in IRC 6511(h)(2)), additional time may be allowed to file a claim.

    2. The statute of limitations will be suspended for the period of time the taxpayer is "financially disabled" .

4.71.8.4  (10-15-2012)
Working a Claim

  1. In general, a claim should be worked as a limited scope correspondence exam. Special processing instructions are noted herein.

  2. Research should be conducted at the group level to ensure that all claim years being worked are properly established on AIMS and RCCMS.

    1. An AMDISA print should be secured to ensure that all years for which a claim has been filed, have been properly established on AIMS.

    2. If it is determined that a claim has not been established, follow procedures in IRM 4.71.8.4.1.

  3. Form 6490 (monthly WebETS time sheet) should reflect:

    • Each year to which a claim applies

    • The applicable activity code for the return being worked

    • Project code 6070

  4. A current transcript of the taxpayer’s account should be secured on all claims so that account activity can be carefully analyzed.

    1. See IRM 4.71.2.3(1) for information on obtaining BMFOLT (Forms 1120, 5330 or 990-T) or IMFOLT (Form 1040) transcripts.

    2. See section 8 of Document 6209, IRS Processing Codes and Information, for a description of Master File transaction codes.

    3. Contact the EP AIMS Coordinator if assistance is needed on reading the transcript.

  5. If the amount claimed has already been refunded to the taxpayer by the Ogden Service Campus (or other Campus), and the examiner agrees that the claim should be allowed, the examiner will close the case as a regular "no change" case.

  6. Copies of all workpapers, forms and letters generated by the agent must be saved in the RCCMS Office Documents folder using the RCCMS Naming Convention.

4.71.8.4.1  (10-15-2012)
Establishing Claims on AIMS and RCCMS

  1. Form 5597, TE/GE IMF/BMF/EPMF Request, should be used to establish claims (not already established) related to Forms 5330, 1040, 1120, and 990-T posted by the Campus on the Master File.

  2. Claims should be established on AIMS and RCCMS with:

    • Source code of 30

    • Project code of 6070

    • Statute of limitations alpha code of "AA" (e.g., 12/AA/2011) designates a claim for refund/credit was filed timely by the taxpayer and a decision has been made that there are no other issues on the return which will warrant an additional assessment and the claimed refund has not been paid to the taxpayer.

      Note:

      See IRM 4.71.9.9(10) for a detailed explanation of the use of alpha code "AA."

    • Statute of limitations alpha code of "BB" (e.g., 12/BB/2011) for all carry back claims

    • The claim amount reflected

4.71.8.5  (10-15-2012)
Claims Allowed in Full, No Taxpayer Contact

  1. Claims may be closed after assignment without contacting the taxpayer or POA if the agent determines that the claim issue is clearly allowable in full and that the return does not otherwise warrant examination. Claims closed in this manner are hereinafter referred to as "surveyed" claims.

  2. Generally, when there is no indication that the case was selected because of the contents of the return, the decision to "survey" can be reached by considering the claim issue only.

  3. The only claims that may not be "surveyed" are those that require Appeals consideration, or which, if allowed would produce overpayments or credits requiring Joint Committee Review.

    1. IRC 6405 provides that Joint Committee Review covers refunds over $2,000,000.

    2. See IRM 4.36 for Joint Committee Procedures.

  4. When recommending allowance of a claim for refund without examination (the claim is being surveyed), prepare Form 1900, Income Tax Survey After Assignment, to explain the reasons.

    1. Form 1900 should also explain claim carry backs if they occur.

    2. Form 1900 must be electronically signed if case is worked completely electronic (no paper files).

    3. Form 1900 should be saved in the RCCMS Office Documents folder using the RCCMS Naming Convention.

    4. See IRM 4.71.8 Exhibit 2 at Employee Plans IRM Exhibits for an example of a completed Form 1900.

  5. Letter 570-A should be used to inform the taxpayer of the allowance of the claim. See IRM 4.71.8 Exhibit 3 at Employee Plans IRM Exhibits for an example of Letter 570-A.

  6. Letter 570-A should be prepared and left in the file for Examinations Special Support and Processing (ESSP) to mail.

  7. The case should be closed AIMS disposal code 34 (RCCMS disposal code 103), Claims Allowed in Full (Surveyed).

  8. A completed Form 5599, TE/GE Examined Closing Record, is required if the claim being allowed relates to a Forms 5330, 990-T, 1040 or 1120. See IRM 4.71.8.5.1.

  9. Form 3198-A, TE/GE Special Handling Notice, should be completed and attached to the outside of the case file following the directions in IRM 4.71.8.5.2, below.

  10. Copies of all workpapers, forms and letters generated by the agent must be saved in the RCCMS Office Documents folder using the RCCMS Naming Convention.

  11. Close the claim on RCCMS and AIMS to ESSP and update AIMS to status code 51.

4.71.8.5.1  (10-15-2012)
Completing Form 5599 when Claim Is Allowed in Full Without Taxpayer Contact

  1. Unless stated otherwise in paragraph (2) below, the following line items on Form 5599, should be completed: P7-18, P21-22, P24-29, P31-34, P52-54, C, 9, 11, 12, 13, 14, 15, 21, 23, 30, 31, 32, 33, 40, and 50.

  2. The following items should be noted when completing these required line items on Form 5599:

    1. P52-54: Enter the three digit plan number of the related plan if the claim is for a Form 5330.

    2. Item 9: Leave blank if the file contains an original return and BMFOLT does not contain an "A" Freeze or AMDIS does not show a 97X. Enter "1" if the file contains an original return and BMFOLT contains an "A" Freeze or AMDIS shows a 97X. Enter "2" if the file contains a copy of the original return and BMFOLT does not contain an "A" Freeze or AMDIS does not show a 97X. Enter "3" if the file contains a copy of the original return and BMFOLT contains an "A" Freeze or AMDIS shows a 97X.

    3. Item 11: Entry is required for carry backs. The date used is the received date of the loss year return.

    4. Item 12: Enter the amount of the claim allowed as a "Tax Liability Adjustment Decrease in Tax Dollars" with a Transaction Code of 301. Otherwise leave blank.

    5. Item 12: If penalties had previously been assessed, enter the amount to be abated as a negative (-). See Section 8 of Document 6209 for applicable transaction codes.

    6. Item 12: With Forms 990-T involving a carry back, use Transaction Code 309 to report the reduction in taxable income as a negative.

    7. Item 13 should reflect a disposal code of 34 (RCCMS disposal code 103).

    8. Item 14: If the statute of limitations has been extended, enter the statute expiration date. Otherwise leave blank.

    9. Item 15: With Forms 5330, the decrease in the Form 5330 excise tax with the abstract code shown as the Ref. No. must be input. The applicable abstract code is found next to the lines where the tax is reported on Form 5330.

    10. Item 15: With Forms 990-T, the reduction in taxable income is shown as a negative with Ref. No. 886.

    11. Item 21: Enter the amount of the claim requested.

    12. Item 32: Enter the grade of the case in the blocks from left to right as two digits (e.g., 11).

    13. Item 40: Enter the project code of 6070.

    14. Item 50: Enter the examiner’s group number.

  3. See IRM 4.71.8 Exhibit 4 at Employee Plans IRM Exhibits for an example of a completed Form 5599 for a claim allowed in full without taxpayer contact.

4.71.8.5.2  (10-15-2012)
Completion of Form 3198-A, TE/GE Special Handling Notice

  1. Form 3198-A, TE/GE Special Handling Notice, should be completed and attached to the outside of the case file with the following information:

    • Person to contact, phone number, and group number

    • Name of the taxpayer

    • Employer Identification Number (EIN)

    • Form number

    • Plan year and plan number (if applicable)

    • Special instructions/information: Indicate if applicable: the case contains a Power of Attorney; a caption: "Amended Return Has Been Considered" ; there are other related years (and if so, list the years), and; the case (or any related case) has less than six months remaining on the statute of limitations date.

      Note:

      This information helps alert Reviewers and ESSP.

4.71.8.6  (10-15-2012)
Processing a Claim when Taxpayer Contact Is Made

  1. If it is determined that it is necessary to contact the taxpayer (or POA) to obtain additional information, update the status code on AIMS to status 12.

  2. Verify that the statute date alpha codes on AIMS are "AA" or "BB" (as applicable), using the month and year of the statute expiration (e.g., 12/AA/2011).

  3. Requests for additional information from the taxpayer may be made by telephone or by use of Letter 1474-A (with Form 886-A). See IRM 4.71.8 Exhibit 5 at Employee Plans IRM Exhibits for an example of Letter 1474-A.

  4. Form 5772, EP/EO Workpaper Summary, and Form 5773, EP/EO Workpaper Summary Continuation Sheet, should be utilized along with any supplemental workpapers necessary to properly document the issue.

  5. Form 3198-A, TE/GE Special Handling Notice, should be attached to the outside of all case file providing the following:

    • Person to contact, phone number, and group number

    • Name of the taxpayer

    • Employer ID number

    • Form number

    • Plan year and plan number (if applicable)

    • Complete the "Special Instructions/Information " section according to IRM 4.71.8.5.2. Additionally indicate if the case (or any related case) is unagreed with less than one year remaining on the statute of limitations date.

      Note:

      Follow the Statute Control Procedures found in IRM 4.71.9.

  6. Copies of all workpapers, forms and letters generated by the agent must be saved in the RCCMS Office Documents folder using the RCCMS Naming Convention.

  7. Claims closing letters should be prepared and left in the file for ESSP to mail.

4.71.8.6.1  (10-15-2012)
Taxpayer Contact Made, Claim Allowed in Full

  1. If, after receiving additional information from the taxpayer (or POA), it is determined that the claim should be allowed in full and it relates to a Form 5330 return, Form 5438, Report of Examination - Excise Taxes on Employee Plans, should be completed as follows:

    1. Form 5438 will be prepared in duplicate.

    2. A statement must be included regarding the allowance of the claim in the "Other Information" section of Form 5438 as follows: "Claim Allowed in Full. On (date) you filed a claim for a refund of $ (amount) for (year). As the result of our examination, we allowed your claim in full, as shown in this report" .

    3. A copy of the completed Form 5438 will be included in the workpapers and a copy mailed to the taxpayer with the closing letter.

      Note:

      See IRM 4.71.8 Exhibit 6 at Employee Plans IRM Exhibits for an example of a completed Form 5438, Report of Examination - Excise Taxes on Employee Plans.

  2. It is not necessary to secure agreement on Form 870, Waiver of Restrictions on Assessment and Collection of Deficiency in Tax and Acceptance of Over-assessment, unless other agreed adjustments in addition to the issue in the claims are involved.

  3. Letter 570-A should be used to inform the taxpayer of the allowance of the claim. See IRM 4.71.8 Exhibit 3 at Employee Plans IRM Exhibits for an example of Letter 570-A.

  4. Letter 570-A should be prepared and left in the file for ESSP to mail.

  5. Form 5599 is required to be completed. See IRM 4.71.8.6.2 below.

  6. Copies of all workpapers, forms and letters generated by the agent must be saved in the RCCMS Office Documents folder using the RCCMS Naming Convention.

  7. Close the case to ESSP and update the AIMS status code to 51.

4.71.8.6.2  (10-15-2012)
Completing Form 5599 when Claim Is Allowed in Full and Taxpayer Contact Is Made

  1. Form 5599 is required to be completed if the claim being allowed relates to Forms 5330, 990-T, 1040, or 1120 established on Master File.

    1. The following line items on Form 5599 should be completed: P7-18, P21-22, P24-29, P31-34, P52-54, C, 12, 13, 14, 15, 21, 23, 30, 31, 32, 33, 40, and 50.

    2. Item 13 should reflect an AIMS disposal code of 03 (disposal code 102 on RCCMS), Agreed Tax Change.

    3. Item 15 should reflect the difference in taxable income.

    4. Item 32: Enter the grade of the case in the blocks from left to right as two digits (i.e., Grade 9 = 09).

    Note:

    Form 5599 is completed in accordance with IRM 4.71.8 Exhibit 4 except the AIMS disposal code is 03 (disposal code 102 on RCCMS).

4.71.8.6.3  (10-15-2012)
Claims Disallowed in Full or in Part

  1. Letter 569-A should be prepared to notify the taxpayer of the disallowance or partial disallowance of the claim. See IRM 4.71.8 Exhibit 7 at Employee Plans IRM Exhibits for an example of Letter 569-A.

    1. IRC 6402(l), added to the Code by RRA 3505, entitles taxpayers to an explanation of the specific reason for the disallowance or partial disallowance of a claim for refund.

    2. This information will enable the taxpayer to respond appropriately to the IRS.

    3. A Revenue Agent’s Report (RAR) should be prepared and attached to Letter 569-A. The RAR should include a description of the facts surrounding the issue, an explanation of the law pertaining to the issue, an explanation of the government’s position, and calculations clearly showing how the partial disallowance was determined (if the claim involves a partial disallowance).

  2. Form 2297, Waiver of Statutory Notification of Claim Disallowance, is applicable in all cases in which there is a full or partial disallowance of a claim.

    1. See IRM 4.71.8.6.4 for instructions on completion of Form 2297.

    2. See IRM 4.71.8 Exhibit 8 at Employee Plans IRM Exhibits for an example of a completed Form 2297.

  3. Form 3363, Acceptance of Proposed Disallowance of Claim for Refund or Credit, is used in all cases where a claim is disallowed in full or in part and no other adjustments to the tax liability are necessary.

    1. See IRM 4.71.8.6.5 for instructions on completion of Form 3363.

    2. See IRM 4.71.8 Exhibit 9 at Employee Plans IRM Exhibits for an example of a completed Form 3363.

  4. Where the claim is disallowed in full and additional tax assessments are also proposed, use Form 2504, Agreement to Assessment and Collection of Additional Tax and Acceptance of Overassessment, or Form 870.

    1. See IRM 4.71.8 Exhibit 10 at Employee Plans IRM Exhibits for an example of Form 2504.

    2. See IRM 4.71.8 Exhibit 11 at Employee Plans IRM Exhibits for an example of Form 870.

  5. If a claim is received on a Form 1040 or Form 1120 discrepancy adjustment, Form 4549-E, Income Tax Discrepancy Adjustments, should be utilized to address the claim. See IRM 4.71.4.10.

  6. An individually designed letter, an RAR (containing an explanation of the disallowance), Form 2297, a copy of the claim, and Form 3363 should be mailed to the taxpayer, giving the taxpayer 15 days to respond.

  7. If there is no response after 15 days, an attempt should be made to contact the taxpayer by telephone.

  8. If the taxpayer fails to sign and return Forms 3363 and 2297 within a reasonable time, prepare a 30 Day Letter package containing the following items:

    • Letter 3602-A, 30-Day Letter - EP Claim Denied

    • RAR in a Facts/Law/Government Position format

    • Form 2297

    • Form 3363

    • Pub 1

    • Pub 594

    • Pub 1020

    • Notice 1214

      Note:

      The 30-Day Letter package will not be mailed out by the agent, but should be placed in the case file. EP Mandatory Review will mail the letter to the taxpayer.

      Note:

      See IRM 4.71.8 Exhibit 12 at Employee Plans IRM Exhibits for an example of Letter 3602-A.

  9. If the taxpayer fails to sign and return Forms 3363 and 2297, complete Form 5599 as specified in IRM 4.71.8.6.2 above, with the exceptions noted in the table below:

    1. Item 12: Leave blank if the claim is disallowed in full and there is no additional assessment.

    2. Item 13: Use disposal code 07 or 10 as applicable.

    3. Item 22: List claim amount disallowed.

    4. Item 23: List the number of hours worked on the claim.

    5. Item 24: List the claim type code.

      Note:

      Common codes are: C for carry back or carry forward claims; E for claims involving excise tax, and; O for other claims.

  10. If the taxpayer fails to sign and return Form 3363 and Form 2297:

    1. Transfer the case to EP Mandatory Review.

    2. Update the status code on AIMS and RCCMS to 20.

    3. Attach Form 3198-A to the outside of the case file, identifying the case as "Mandatory Review" , and notate: "Unagreed Claim" .

    4. If less than one year remains on the statute of limitations, see IRM 4.71.9, Statute Control Procedures, for special instructions.

  11. If the taxpayer signs and returns Form 2297 and Form 3363, the following steps should be taken:

    1. Complete Form 5599 in accordance with IRM 4.71.8.6.2 above; however, disposal code 01, Regulatory/Revenue Protection, should be used.

    2. Prepare Letter 2087 with copies of Forms 3363 and 2297 attached, if the claim applies to Form 5330.

      Note:

      See IRM 4.71.8 Exhibit 13 at Employee Plans IRM Exhibits for an example of Letter 2087.

    3. Prepare Letter 2511 with copies of Forms 3363 and 2297 attached, if the claim applies to Form 990-T.

      Note:

      See IRM 4.71.8 Exhibit 14 at Employee Plans IRM Exhibits for an example of Letter 2511.

    4. Claims closing letters should be prepared and left in the file for ESSP to mail.

    5. Copies of all workpapers, forms and letters generated by the agent must be saved in the RCCMS Office Documents folder using the RCCMS Naming Convention.

    6. Close the case to ESSP and update the AIMS status code to 51.

4.71.8.6.4  (10-15-2012)
Form 2297, Waiver of Statutory Notification of Claim Disallowance

  1. Form 2297 is applicable in all cases in which there is a complete or partial disallowance of a claim. See IRM 4.71.8 Exhibit 8 at Employee Plans IRM Exhibits for an example of Form 2297.

  2. Attach Form 2297 to the applicable claim or amended return.

    Note:

    Where claims for multiple years are disallowed, attach Form 2297 covering all years to the claim or amended return covering the most recent year.

  3. When completing Form 2297:

    1. Enter the name, EIN or SSN, and address of taxpayer where indicated.

    2. Taxable Period Ended: List each year for which a claim has been filed and disallowed in part or in full on separate lines as follows: For a short period, reflect the beginning and ending date (e.g., 01/01/2010– 09/30/2010). In all other cases, list the period ending date (e.g., 12/31/2010).

    3. Kind of tax: Enter the type of tax covered by the return under examination, such as income or excise. It is not necessary to show the form number of the return under examination or to identify the type of income.

    4. Enter the amount of the claim and the amount of the claim disallowed where indicated.

    5. See instructions at the bottom of the form for taxpayer’s signature.

4.71.8.6.5  (10-15-2012)
Form 3363, Acceptance of Proposed Disallowance of Claim for Refund or Credit

  1. Form 3363 is used in all cases where a claim is disallowed in full or in part and no other adjustments to the tax liability are necessary. See IRM 4.71.8 Exhibit 9 at Employee Plans IRM Exhibits for an example of Form 3363.

  2. When completing Form 3363:

    1. Enter the name, EIN or SSN, and address of taxpayer where indicated.

    2. Year or period: List each year for which a claim has been filed on separate lines as follows: For a short period, reflect the beginning and ending date (e.g., 01/01/2010– 09/30/2010). In all other cases, list the period ending date (e.g., 12/31/2010).

    3. Date claim filed: Enter date Form 843 or amended return was filed.

    4. Kind of tax: Enter the type of tax covered by the return under examination, such as income or excise. It is not necessary to show the form number of the return under examination or to identify the type of income.

    5. Amount of claim: Enter the amount of refund requested in the claim filed by the taxpayer. The rules for determining the amounts to be entered as claims under particular circumstances are as follows:

      IF... THEN...
      a. A claim states a definite amount as being claimed, Enter this amount in the "amount of claim" space.
      b. An amended return shows the computation of the corrected amount as computed by the taxpayer, Enter the tax as shown on the original return in the "amount of claim " space.
      c. A claim is filed for "$1 or more" and no details are shown as to the amount of reduction in income, Enter $1 as "amount of claim" .
      d. A claim is filed for "$1 or more" and details are provided as to the amount of reduction in income but computation of amount of tax refund is not shown on the claim, Compute the amount of the claim based upon reduction of income shown by the taxpayer and enter this figure as "amount of claim" .
      e. A claim is filed for "entire amount of tax paid" , Enter the entire amount of tax shown on the return.
      f. A claim is filed for "such amount as may be due" and details are shown as to the reduction in income and computation of the tax refund can be made, Enter the computed figure in "amount of claim" space.

    6. Amount of claim disallowed: Enter the amount of claim disallowed per the RAR.

    7. Amount of claim allowed: Enter the amount of claim allowed per RAR.

    8. Signature: See instructions on Form 3363.

4.71.8.7  (10-15-2012)
Effect of Claim on IRC 4971 or 4975 Tax

  1. IRC 4961 prohibits any levy or court proceeding for the collection of the 100% tax under IRC 4971 or IRC 4975 pending the final resolution of court proceedings concerning the first tier tax under those sections if the taxpayer timely pays the first tier tax and files a claim for refund.

  2. If it is determined that the first tier tax under IRC 4971 or 4975 should be imposed, solicit a delinquent Form 5330 and request payment of the tax.

  3. If correction has not occurred at that time, advise the taxpayer that, if correction does not occur in a timely manner, any levy or court proceeding for the collection of the 100% tax will be prohibited pending the final resolution of court proceedings concerning the first tier tax if the taxpayer:

    1. Pays the first tier tax, and

    2. Files a claim for refund of the first tier tax within 90 days after the date when the 100% tax is assessed.

4.71.8.8  (10-15-2012)
Collection of Deficiencies and Installment Agreements

  1. If payment is received, checks must be processed in accordance with GAO recommendations:

    1. Make sure the check is made out to the United States Treasury. If the payee line is blank or the check is made out to "IRS" , overstamp the check with the "United States Treasury" stamp.

    2. The check information (date of check, check number, amount, payer, IRS recipient name and date received) must be entered into the logbook required to be maintained by the group.

    3. Complete Form 3244-A, Payment Posting Voucher - Examination.

    4. Complete Form 3210, Document Transmittal, to accompany the payment being sent to the Service Campus. The body of the Form 3210 should include the taxpayer’s name, SSN/EIN, tax return form number, amount of payment, and check number. If the payment applies to more than one tax period, the breakdown and details should be noted and itemized on the Form 3210.

    5. After preparation of Form 3244-A and Form 3210, a group manager must review the Form 3210, compare it to the Form 3244-A and sign the Form 3210. The person who prepares the Form 3244-A cannot be the same person who signs the Form 3210.

    6. Make a copy of Form 3244-A, Form 3210 and the payment (i.e., check) to be retained in the case file.

    7. By the end of the next business day after receipt, the check along with the Form 3244-A and Form 3210, must be sent express mail (next day) to the Ogden Service Campus at the address listed in paragraph (2) or (3) of this section.

    8. If the check cannot be mailed to Service Campus the same day it is received, it must be secured in a locked file overnight.

    9. The check must be placed in a separate addressed envelope along with the completed Form 3244-A when placed within the express mail envelope.

    10. If the acknowledgement copy of Form 3210 is not received back from the Service Campus within 10 days after mailing, the Service Campus must be contacted to follow-up receipt of the check. These actions must be documented in the group logbook.

    Note:

    Do not include a copy of Form 4549-E with the payment package sent to the Service Campus. Doing so may cause double assessment of tax to occur.

  2. Mail remittance less than $100,000 to:
    IRS
    Attention: Teller Unit
    1973 N. Rulon White Blvd.,
    Mail Stop 1999
    Ogden, UT 84201-1000

  3. If remittance of $100,000 or more is received, mail the check to the same address in paragraph (2) but use Mail Stop 2003.

  4. When addressing the Express Services Routing slip (Form 9814), the recipient name should be "Mail Supervisor" with the recipient phone number of (801) 620-3750. This is the case whether or not payment is remitted.

  5. Procedures for installment agreements are contained in IRM 5.14, Installment Agreements.

4.71.8.9  (10-15-2012)
Abatement of Interest Due to IRS Delay or Error

  1. IRC 6404(e)(1) was added by the Tax Reform Act of 1986 to provide for abatement of interest on deficiencies or payments when the IRS makes an error or delay in the performance of a ministerial or managerial act, as noted below.

    Note:

    See IRM 20.2.7 for additional information on this provision.

  2. A "ministerial act" is a procedural act or mechanical act that does not involve the exercise of judgment or discretion and occurs during the processing of a taxpayer’s case after all prerequisites to the act, such as conferences and reviews by supervisors, have taken place.

    Note:

    For example , an audit selection letter is sent to the taxpayer’s old address and then forwarded to the new address. In response to the appointment letter, the taxpayer notifies the IRS of the new address and requests a transfer of the audit to an office closer to the new address. The manager approves the transfer request. The IRS, in its discretion, may abate interest attributable to any unreasonable delay in transferring the case.

  3. A "managerial act" is an administrative act that occurs during the processing of a taxpayer’s case involving the temporary or permanent loss of records or the exercise of judgment or discretion relating to management of personnel.

    Note:

    For example (continuing with example in the "Note" in paragraph (2) above), after the manager approves the transfer of the case, the clerk misplaces the case file. The "misplacing of the file" is a managerial act. The IRS, in its discretion, may abate interest attributable to any unreasonable delay caused by the misplacement of the file.

  4. Under IRC 6404(e)(1), the IRS has the authority to abate the amount of interest that accrued during the period in which the unreasonable error or delay in performing a ministerial or managerial act occurred.

    1. It applies only when an unreasonable error or delay occurred after the date the IRS contacts the taxpayer in writing with respect to an audit deficiency or payment.

    2. Interest accruing from the return due date up to when the IRS first contacts the taxpayer is not abated under this provision because the taxpayer is aware of the tax liability reported on the filed return as well as the consequences (which are penalties and interest) if the liability is not paid by the return due date.

  5. The IRS has discretionary authority to allow claims for abatement of interest when all of the following conditions are met:

    1. The statutory period of limitations under IRC 6511 on filing a claim has not expired.

    2. The claim relates to interest on taxes described in IRC 6212(a), such as income, estate, gift and excise taxes under Chapters 41, 42, 43, and 44.

      Note:

      IRC 6404(e)(1) does not allow abatement of interest on employment tax deficiencies or payments.

    3. An unreasonable error or delay occurred in relation to the performance of a ministerial or managerial act.

    4. Error or delay occurred after the taxpayer was contacted in writing with respect to the examination, deficiency, or payment.

    5. No significant aspect of the error or delay can be attributed to the taxpayer/ representative.

      Note:

      An interest abatement claim under IRC 6404(e)(1) not meeting all of the above criteria is automatically disallowed by law.

4.71.8.9.1  (10-15-2012)
Claims for Abatement of Interest

  1. Requests for abatement of interest should be made by the taxpayer on Form 843, Claim for Refund and Request for Abatement.

    1. The claim should be filed with the Campus where the tax return was filed, or, if the identity of that Campus is unknown, with the Campus where the taxpayer’s most recent tax return was filed.

    2. The claim should clearly state across the top "Request for Abatement of Interest under Rev. Proc. 87-42."

  2. If the interest assessed resulted from the IRS’s error or delay in performing a single ministerial or managerial act that affected a tax assessment for multiple tax years or types of tax (e.g., where two or more tax years were under examination) only one Form 843 is required.

    1. Otherwise, a separate Form 843 should be filed for each tax period for each type of tax.

    2. It is not necessary to compute the dollar amount of interest for which abatement is requested.

    3. Instructions on completing Form 843 are available with the form at Publishing Service's website at http://publish.no.irs.gov/catlg.html.


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