4.71.12  Case File Assembly Guidelines

Manual Transmittal

July 17, 2014

Purpose

(1) This transmits revised IRM 4.71.12, Employee Plans Examination of Returns - Case File Assembly Guidelines.

Background

IRM 4.71.12 contains procedures for assembling examined Forms 5500 series returns, Non-Return Units (NRU), Forms 5330, Forms 990-T and Forms 1040/1120 discrepancy adjustments.

Material Changes

(1) This revision makes minor clarifying corrections to the May 9, 2013, published version of IRM 4.71.12.

(2) The links to the IRM Exhibits have been updated. The Exhibits are now posted on TE/GE Connect under the JOB tab at IRM 4.71 - Employee Plans Examination Exhibits.

Effect on Other Documents

This supersedes IRM 4.71.12 dated May 9, 2013.

Audience

TE/GE Employee Plans

Effective Date

(07-17-2014)


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

4.71.12.1  (07-17-2014)
Case File Assembly Overview

  1. The following guidelines and procedures are provided for EP agents in the assembling of EP examined Form 5500, Annual Return/Report of Employee Benefit Plan, Form 5500-SF, Short Form Annual Return/Report of Small Employee Benefit Plan; Form 5500-EZ, Annual Return of One-Participant (Owners and Their Spouses) Retirement Plan), Form 5330, Return of Excise Taxes Related to Employee Benefit Plans, Form 990-T, Exempt Organization Business Income Tax Return, and discrepancy adjustments for Form 1040, U.S. Individual Income Tax Return, Form 1120, U.S. Corporation Income Tax Return and Non-Return Units (NRU).

  2. Copies of all workpapers, forms and letters generated by the agent must be saved in the Reporting Compliance Case Management System (RCCMS) Office Documents folder using the RCCMS Naming Convention. See IRM 4.71.12 Exhibit 1 at IRM 4.71 - Employee Plans Examination Exhibits for the RCCMS Naming Convention.

  3. Guidelines for the assembling of claims are set forth in IRM 4.71.12.6.

  4. These guidelines apply to cases forwarded from the EP group to Mandatory Review (Mandatory Review), EP Special Review (Special Review), or to Examinations Special Support and Processing (ESSP).

4.71.12.2  (07-17-2014)
Key Concepts

  1. An examination may involve various related returns. There may be multiple years, multiple plans, related taxpayers, and various types of returns.

    1. To the extent possible, related returns will be assembled and processed together as a group of case files.

    2. Each examined return will be placed in its own individual case file folder (unless no paper files are required as provided for in this IRM).

    3. The related returns within the group of case files will be organized into packages of returns based upon return type, plan number and taxpayer as exemplified in IRM 4.71.12.2(5) and (6), below.

  2. The documents required to be included in paper case files depend on whether the examination is being closed as "agreed" or "unagreed" .

  3. "Unagreed" cases are those cases in which the taxpayer disagrees with the agent’s position, or agrees only in part. The case is "unagreed" if any, or all, of the following conditions exist:

    1. An "unagreed" Form 5500 examination is one that involves a qualification issue that cannot be resolved through EPCRS or through a Delegation Order 8-3 closing agreement.

    2. The amount of tax due on a Form 1040, Form 1120, Form 5330 or Form 990-T is in dispute.

    3. With regard to IRC 4971 or IRC 4975 excise tax, the initial tax is not in dispute but the taxpayer cannot or will not correct the issue giving rise to the excise tax, or the correction or proposed correction is not acceptable to the IRS.

    4. The taxpayer refuses to file a delinquent Form 5330 or sign Form 870-EP, Waiver of Restrictions on Assessment and Collection of Deficiency in Tax and Acceptance of Overassessment.

    5. The taxpayer refuses to file a delinquent Form 990-T or sign Form 870-EP.

    6. The taxpayer refuses to file an amended Form 1040 or Form 1120 or sign a Form 4549-E, Income Tax Discrepancy Adjustments.

  4. An "agreed" case is one that is not "unagreed" .

  5. The definitions of key terms as they relate to these guidelines are as follows:

    1. Lead Exam File — The originally assigned return is considered the Lead Exam File. The Lead Exam File should be on top and identified by labeling it as such. If the case is "unagreed" , this file should contain a complete set of workpapers, a case chronology record, a closing document (Form 5650 or Form 5599 as applicable) and the subject return. See IRM 4.71.12.3 below for additional instructions.

      Note:

      For "unagreed" Forms 5500, all correspondence shared with the taxpayer and/or POA relating to any year must be included in the Administrative Record. See IRM 4.71.3.3.4 and 4.71.3.3.4.1.

      Note:

      If the complete set of workpapers encompass documents giving rise to a Related Exam (i.e., a Form 5500 exam gives rise to a Form 5330 exam) then those workpapers relating to the related file (i.e., Form 5330 file) should be copied and also placed in the Primary Related Exam File, as noted in paragraph c) of this section.

    2. Related Exam File — All returns that are examined with the Lead Exam File are Related Exams. These are identified by labeling these folders as Related Exam Files. These cases can be other Forms 5500, or related Forms 5330, 1040, etc. If the exam is "unagreed" , these files will each contain Form 5599, TE/GE Examined Closing Record, or Form 5650, EP Examined Closing Record, and the subject return. One file will be labeled as the Primary Related Exam File as described in the following paragraph.

    3. Primary Related Exam File — The oldest year in each related Case File Package will be tagged as the Primary Related Exam File. If "unagreed" , this file should contain a complete set of workpapers, a case chronology record, Form 5650 or Form 5599 (as applicable) and the subject return.

    4. Case File Package — A Case File Package is a group of like returns. For example, all Form 5500 years examined for plan #001 for the XYZ Corporation would be in the same Case File Package. Any Form 5330 returns for the XYZ Corporation related to plan #001 would be in a separate Case File Package.

    5. Top to Bottom — Assemble documents within the case file beginning with those listed first on the top and ending with the document listed last on the bottom of the file.

  6. Example: An examination of the 201012 year Form 5500 return for plan #001 of the XYZ Corporation revealed both a qualification defect within plan #001 and a prohibited transaction between plan #001 and the disqualified person, Mr. X. These issues affected the 201012 and 201112 plan and tax years. This resulted in the agent opening examinations of the Form 5500 for the 201112 plan year as well as Forms 5330 for the 201012 and 201112 tax years for Mr. X. XYZ Corporation did not agree with the agent's proposed report for the qualification defect. Mr. X also did not agree with the prohibited transaction. As a result of this examination, the entire exam is closed "unagreed" and there is one group of returns with two case file packages contained in four file folders as follows:

    1. Case File Package #1 – contains Forms 5500 for plan 001 for 201012 (labeled as the Lead Exam File) and one Related Exam File for 201112 (within a separate file folder). The file folder for the year 201012 would contain a complete set of workpapers, the subject return and IDRS research. Each other Related Exam File will contain only the closing document and the subject return.

      Note:

      Since the case involves proposed disqualification of the plan, correspondence would be placed in the Administrative Record.

    2. Case File Package #2 – includes Forms 5330 for Mr. X for 201012 labeled as the Primary Related Exam File and the Related Exam File for 201112, with each return in a separate file folder. The Primary Related File folder for the year 201012 will contain a complete set of workpapers, the closing document, the subject return and all correspondence related to Forms 5330 for Mr. X. The Related Exam File will contain the closing document and the subject return.

4.71.12.3  (07-17-2014)
Assembly Guidelines for All "Agreed" Examinations

  1. 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. See IRM 4.71.12 Exhibit 1 at IRM 4.71 - Employee Plans Examination Exhibits for the RCCMS Naming Convention.

  2. For "agreed" Form 5500 exams with less than 180 days remaining on the statute of limitations, the following paper documents must be in individual red folders for each year with a completed Form 10329, Transmittal Sheet-Related Cases, stapled to the outside front of the file (listing not only the return in the folder but also all related exams) See IRM 4.71.12 and Form 3198-A stapled to the front (if there are special processing instructions):

    • Form 895-EP, Notice of Statute Expiration (as required by paragraph 2 of IRM 4.71.9.3)

    • Form 5500

    • Form 872-H, Consent to Extend the Time to Assess Tax on a Trust (if secured, attach face down to the back of Form 5500)

    • Form 2848, Power of Attorney and Declaration of Representative, or Form 8821, Tax Information Authorization (if secured and not scanned and saved in the RCCMS Office Documents folder)

    • Form 5650

    • Closing letter

    • Form 906, Closing Agreement on Final Determination Covering Specific Matters

    • Form 5772, EP/EO Workpaper Summary

      Note:

      In addition to the above items listed, any other paper documents necessary to document the audit trail (that are not saved in the RCCMS Office Documents folder) should also be included in the paper file.

      Note:

      A Form 5500 exam for which the statute of limitations has been properly updated to alpha code "PP" is not considered a short statute case and should follow the requirements of paragraph (3) below.

      Note:

      Form 10329 is not required if there are no other paper files or if there are no related returns. See IRM 4.71.12 Exhibit 2 at IRM 4.71 - Employee Plans Examination Exhibits for an example of Form 10329.

  3. For "agreed" Form 5500 exams with 180 days or more remaining on the statute of limitations, the following paper documents must be in individual folders for each year with a completed Form 10329 stapled to the front of the file (listing not only the return in the folder but also all related exams) and Form 3198-A stapled to the front (if there are special processing instructions):

    • Form 895-EP (if required to be prepared in accordance with paragraph 2 of IRM 4.71.9.3, and not scanned and saved in the RCCMS Office Documents folder)

    • Form 5500 (if secured and a copy is not saved in the RCCMS Office Documents folder)

    • Form 872-H (if secured, attach face down to the back of Form 5650 or Form 5500)

    • Form 2848 or Form 8821 (if secured and not scanned and saved in the RCCMS Office Documents folder)

    • Form 906 (if applicable)

    • If the statute of limitations has been updated to alpha code "PP" in accordance with IRM 4.71.9.3(4), a copy of the memorandum of explanation (signed by the manager). See Exhibit 2 of IRM 4.71.9, Statute Control Procedures.

      Note:

      In addition to these items listed, any other paper documents necessary to document the audit trail (that are not saved in the RCCMS Office Documents folder) should also be included in the paper file.

      Note:

      Form 10329 is not required if there are no other paper files or if there are no related returns.

  4. For "agreed " Form 5330 exams, the following paper documents must be in individual folders for each year (red folder if less than 180 days remain on the statute of limitations) with a completed Form 10329 stapled the front of the file (listing not only the return in the folder but also all related exams) and Form 3198-A stapled to the front (if there are special processing instructions):

    • Form 895-EP (if required to be prepared in accordance with paragraph 2 of IRM 4.71.9.3, and not scanned and saved in the RCCMS Office Documents folder)

    • Copy of the Form 5330 package mailed to the Ogden Campus as detailed in IRM 4.71.5.6.3.1

      Note:

      If payment is received with a delinquent Form 5330, Form 3244-A, Payment Posting Voucher - Examination, and a copy of the check will be included as part of this package.

    • Form 872, Consent to Extend the Time to Assess Tax (if secured, attach face down to the back of Form 5330)

    • Form 2848 or Form 8821 attached to the back of the first page of the return (if there is a valid 2848 or 8821 and it's not scanned into the RCCMS Office Documents folder)

    • Form 870-EP (if applicable)

    • Form 5438, Report of Examination - Excise Taxes on Employee Plans

    • Form 5599

    • Closing letter(s) (to be mailed by the closing unit)

    • Form 5772 (if less than 180 days are remaining on the statute of limitations)

    • A copy of Form 3244-A and a copy of the check if payment is received with Form 870-EP

      Note:

      In addition to the above items listed, any other paper documents necessary to document the audit trail (that are not saved in the RCCMS Office Documents folder) should also be included in the paper file.

      Note:

      Form 10329 is not required if there are no other paper files or if there are no related returns.

  5. For "agreed " Form 990-T exams, the following paper documents must be in individual folders for each year (red folder if less than 180 days remain on the statute of limitations) with a completed Form 10329 stapled on front (listing not only the return in the folder but also all related exams) and Form 3198-A stapled to the front (if there are special processing instructions):

    • Form 895-EP (if required to be prepared in accordance with paragraph 2 of IRM 4.71.9.3)

    • Copy of all Form 990-T packages mailed to the Ogden Campus as detailed in IRM 4.71.10.4.3

      Note:

      If payment is received with a delinquent Form 990-T, Form 3244-A and a copy of the check will be included as part of this package.

    • Form 872 (if secured, attach face down to the back of Form 990-T)

    • Form 2848 or Form 8821 attached to the back of the first page of the return (if there is a valid 2848/8821 and it's not scanned into the RCCMS Office Documents folder)

    • Form 870-EP (if applicable)

    • Form 5599

    • Closing letter(s) (to be mailed by the closing unit)

    • Form 5772 (if less than 180 days are remaining on the statute of limitations)

    • A copy of Form 3244-A and a copy of the check if payment is received with Form 870-EP

      Note:

      In addition to these items listed, any other paper documents necessary to document the audit trail (that are not saved in the RCCMS Office Documents folder) should also be included in the paper file.

      Note:

      Form 10329 is not required if there are no other paper files or if there are no related returns.

  6. For "agreed " Forms 1040 or 1120 discrepancy adjustments, the following paper documents must be in individual folders for each year (red folder if less than 180 days remain on the statute of limitations) with a completed Form 10329 stapled to the front (listing not only the return in the folder but also all related exams) and Form 3198-A stapled to the front (if there are special processing instructions):

    • Form 895-EP (if required to be prepared in accordance with paragraph 2 of IRM 4.71.9.3)

    • Copy of Form 1040/1120 (or RTVUE/BRTVU print)

    • Form 872 (if secured, attach face down to the back of Form 1040/1120)

    • Form 2848 or Form 8821 (if applicable) attached to the back of the first page of the return (if there is a valid 2848/8821 and its not scanned into the RCCMS Office Documents folder)

    • Form 4549-E

    • Form 5599

    • Form 5772 (if less than 180 days are remaining on the statute of limitations)

    • A copy of Form 3244-A and a copy of the check if payment is received.

    Note:

    Form 10329 is not required if there are no other paper files or if there are no related returns.

  7. For "agreed " NRU exams, the following paper documents must be in individual folders for each year with a completed Form 10329 stapled on front (listing not only the return in the folder but also all related exams) and Form 3198-A stapled to the front (if there are special processing instructions):

    • Form 2848 or Form 8821 (if secured and not scanned and saved in the RCCMS Office Documents folder)

    • Form 906 (if applicable)

    • Form 5650 or Form 5599 as applicable

      Note:

      In addition to these items listed, any other paper documents necessary to document the audit trail (that are not saved in the RCCMS Office Documents folder) should also be included in the paper file.

      Note:

      Form 10329 is not required if there are no other paper files or if there are no related returns.

  8. A Form 5500 exam for which the statute of limitations has been properly updated to alpha code "PP" is not considered a short statute case and should not be placed in a red folder.

4.71.12.4  (07-17-2014)
Assembly Guidelines for All "Unagreed" Examinations

  1. The following guidelines are only applicable for "unagreed" cases closed to Mandatory Review.

  2. Outside-front— The following items, if applicable, should be stapled to the outside front of all files from top to bottom:

    • Form 10329 (if there are multiple years or related returns)

      Note:

      Form 10329 must list not only the return in the folder but also all Related Exams.

    • Form 895-EP (if applicable)

    • Form 3198–A, TE/GE Special Handling Notice

  3. The following items must be completed on Form 3198-A:

    1. Check the box for EP.

    2. Complete the information related to the agent assigned the case in the "Required Entries" section - Person to Contact, Employee ID#, Phone #, and Group.

    3. Complete the information related to the case file in the "Required Entries" section - EIN/SSN, MFT, Plan # (if applicable), Year and Taxpayer's Name. Also, mark any box that applies to the case.

    4. In the "Required Entries" section under "Earliest Statute Date Is:" enter the statute date of the case to which the Form 3198-A is attached.

    5. Select "Mandatory Review" and "Unagreed Case" in the "Mandatory Review/Operations" section.

  4. Examples of other items to be completed for proper processing of the case are as follows:

    1. If the case involves a discrepancy adjustment, indicate accordingly in the "Special Features" section.

    2. For Form 1040 discrepancy adjustments in which interest is required to be suspended under IRC 6404(g), provide instructions in the "Other Instructions" section in accordance with paragraph 10 of IRM 4.71.4.5.1.

  5. Inside-left — The following items, if applicable, should be securely attached to the inside-left of the Lead Exam File or the Primary Related Return File (for the package to which it relates), from top to bottom:

    • Computer disk containing the closed RGS case for the Form 1040 or Form 1120 discrepancy adjustment

    • File copy of Form 5457, Response to Reviewer’s Memorandum — EP/EO (to be placed here when the case is being closed from Mandatory Review or Special Review to the EP Closing Unit)

    • File copy of Form 5456, Reviewer’s Memorandum — EP/EO (to be placed here when the case is being closed from Mandatory Review or Special Review to the EP Closing Unit)

    • CECA and any other checksheets for special projects flagged for proper disposition

  6. Inside-right— The following should be placed from top to bottom on the inside-right of the file:

    • Form 5456 and Form 5457

      Note:

      If the case is being sent from the group to Mandatory Review (or Special Review) or from Mandatory Review (or Special Review) to the group due to issuance of a Reviewer’s Memorandum, Forms 5457 and 5456 should be placed on the right hand side of the case file, loose and on top of all other items.

    • The Unagreed Case Package

      Note:

      For "Unagreed" cases closed from the group to Mandatory Review, the Unagreed Case Package should be clipped together and placed here. The Unagreed Case Package consists of the 30 Day Letter (unsigned and undated), Revenue Agent Report (RAR), Form 4549–E if assessing additional income tax, Form 870-EP if additional excise tax is being assessed, Form 5438 if excise tax is being assessed, excise tax calculations if excise tax is being assessed, penalty calculations if penalties are being assessed, copy of Form 5597 (if applicable), and the substitute for return package (if applicable).

    • Form 4442, Inquiry Referral

      Note:

      This is the form to be used to make entity changes for correcting information on Forms 5500 returns.

    • Closing document and return clipped together in one package (see IRM 4.71.12.4.1, below).

    • All workpapers

      Note:

      All workpapers should be rubber-banded or clipped together and placed in the order as noted in IRM 4.71.12.4.2, below.

4.71.12.4.1  (07-17-2014)
The Closing Document and Return Package

  1. The closing document and return package should be organized and clipped together, as follows:

    1. Form 5650 or Form 5599

      Note:

      Form 5599 is used to close Forms 5330 established on master file, Forms 1040/1120 discrepancy adjustments and Forms 990–T.

    2. Current AMDISA print stapled to the left side of the Form 5650 or Form 5599

    3. Applicable return with the following documents (as applicable) clipped together, as described below:

      Form No. Form Name Treatment/Arrangement
      2848 (or 8821) Power of Attorney and Declaration of Representative Stapled face down to the back of the first page of each return to which it applies.
      872 or 872-H Consent to Extend the Time to Assess Tax Stapled face down to the back of the last page of the return with the most current on the top.

      Note:

      Form 56 may apply, see below.

      56 Notice Concerning Fiduciary Relationship Stapled to the back of the Form 872-H to which it applies.
      3198–A TE/GE Special Handling Notice If the applicable return is a delinquent return that was forwarded to the Service Center for processing (inclusive of penalty assessment instructions) include a file copy.
      3244–A Payment Posting Voucher – Examination Attach the file copy of the Form that was processed with a tax or penalty payment by stapling to the left side of the first page of the return.
      none EP Classification Sheet Stapled face down to the back of the return.

4.71.12.4.2  (07-17-2014)
Workpaper Organization

  1. All workpapers should be rubber-banded or clipped together and placed in the order as noted below, from top to bottom.

  2. Workpapers must be indexed to the Form 5772.

  3. Nothing should be marked to purge.

  4. EP agents themselves should purge any documents that are duplicates and/or immaterial to the examination issues.

  5. All correspondence and information prepared for and transmitted to the taxpayer must be saved.

  6. Items to be included are:

    • File copy of the Revenue Agent Report (RAR)

    • Form 4632, Employee Plans Referral, and related checksheets (Form 4632-A, Employee Plans Referral Checksheet, Form 4632-B, Employee Plans Referral Checksheet - IRC 403(b) Plan, or Form 4632-C, Employee Plans Referral Checksheet-For FSLG-IRC403(b)/457 and Social Security Alternative Plans), if the case involves a referral received from an Examination Functional Unit.

    • Form 5772

    • Form 5773, EP/EO Workpaper Summary Continuation Sheet

      Note:

      Form 5773 is optional only if all examination findings are documented within the workpapers.

    • Form 5464, Case Chronology Record

    • Workpapers and exhibits indexed to Form 5772

    • File copy of Form 6212–B, Examination Referral Checksheet B, indexed to Form 5772 as workpaper S–1 (the file copy of any referral sent to Department of Labor (DOL) including any attachments)

      Note:

      The original Form 6212–B should have been previously routed to DOL through EP Classification in El Monte, CA by the EP agent in accordance with IRM 4.71.6.8. The case must remain open until the earlier of twenty days from the date mailed to Classification, or the date feedback is received.

    • File copy of Form 6533, Examination Referral Worksheet (if applicable), indexed on Form 5772 as workpaper S–2

      Note:

      If a referral was required, the original Form 6533 should have been previously routed to PBGC with a courtesy copy to EP Classification in El Monte, CA in accordance with IRM 4.71.6.9.

    • File copy of Form 6229, Collateral Examination (if applicable)

    • Copy of the Audit CAP checksheet, indexed as workpaper T-1 or T-2 (if resolution through a closing agreement was discussed but rejected)

    • File copy of Form 6212–A, Examination Referral Checksheet A (if a referral was received from DOL, including any attachments)

    • Form 5666, TE/GE Referral Information Report (file copies of Forms 5666 both sent and received including any attachments, if applicable) indexed on Form 5772 as workpaper T–3–1

      Note:

      The original Form 5666 (with supporting documentation) should have been sent directly to EP Classification in El Monte, CA by the EP agent in accordance with IRM 4.71.6.5, EP Group Procedures – Making Referrals Within EP.

    • File copy of Form 5346, Examination Information Report (including attachments supporting the referral, if applicable), indexed on Form 5772 as workpaper T–3–2

      Note:

      The original Form 5346 (with supporting documentation) should have been previously routed to the Examination Functional Unit (LB&I or SB/SE) through EP Classification in El Monte, CA by the EP agent in accordance with IRM 4.71.6.7, EP Group Procedures – Making Referrals to Exam Functional Units.

    • Correspondence

      Note:

      For "unagreed" Forms 5330, 990-T or 1040/1120 discrepancy adjustments, include correspondence between the Service and the taxpayer and/or POA assembled in chronological order with the most recent letter on top (initial contact letter at the bottom).

      Note:

      For "unagreed" Forms 5500, all correspondence shared with the taxpayer and/or POA related to any year must be included in the Administrative Record. See IRM 4.71.3.3.4, Administrative Record, and 4.71.3.3.4.1, Examples of Documents Included in the Administrative Record.

    • Copies of delinquent return processing documents (Form 3210, Form 4571, etc. if applicable)

    • Copy of Form 5597 if the return was established in the group

    • Prints of the most recent IDRS research

    • Miscellaneous items

4.71.12.4.3  (07-17-2014)
Special Assembly Guidelines for Related Exam Files that Are "Unagreed"

  1. As discussed in IRM 4.71.12.2 above, all returns that are examined with the Lead Exam File are Related Exams.

  2. These are identified by labeling these folders as Related Exam Files or Primary Related Exam File. See paragraph 5 of IRM 4.71.12.2 above for definitions.

  3. These cases can be other Forms 5500, or related Forms 5330, 1040, etc.

  4. If the exam is "unagreed" , these files will contain the following items on the inside right (from top to bottom):

    • Form 5599 (for Form 5330 or Form 990-T exams or Form 1040/1120 discrepancy adjustments) or Form 5650 (for Form 5500 exams)

    • An AMDISA print for the subject return stapled to the front of the closing document

    • The subject return (Form 5500, Form 5330, or Form 990-T) or RTVUE/ print (Form 1040) or BRTVU print (Form 1120)

      Note:

      If a "substitute for return" (SFR) Form 5330 or 990-T was forwarded to the Service Center, a copy of the whole SFR package will be included.

    • A copy of Form 4549-E if the case is a Form 1040/1120 discrepancy adjustment

    • If the file is a Primary Related Exam File, a complete set of workpapers as detailed in IRM 4.71.12.4.2 above

      Note:

      This includes Form 5772, a case chronology record (Form 5464) and correspondence that specifically pertains to the subject return (unless the Primary Related Return is an "unagreed" Form 5500, in which case correspondence will be included in the Administrative Record).

  5. The following items, if applicable, should be stapled from top to bottom to the outside-front of each Related Exam File or Primary Related Exam File to which it pertains:

    • Form 10329

      Note:

      Form 10329 must list not only the return in the folder but also all Related Exams.

    • Form 895-EP

      Note:

      All entries on the Form 895-EP should be completed and updated prior to closure of the case from the group.

    • Form 3198–A

      Note:

      It should include all relevant information as discussed under IRM 4.71.12.4(3).

4.71.12.5  (07-17-2014)
Additional Assembly Guidelines for All EP Exam Files

  1. Place in a red folder all files that contain a return for which the statute of limitations will expire within 180 days.

  2. If case files within a Case File Package are closed separately, a complete set of workpapers (See IRM 4.71.12.4.2 above) should be included in each group of cases closed separately. In effect, a new Lead Exam File is created. The oldest year in each group of cases should be treated as a Lead Exam File.

4.71.12.6  (07-17-2014)
Special Case File Assembly Instructions for Claims

  1. A separate case file should be maintained for each year and return type for which a claim is being filed.

  2. See IRM 4.71.8 for procedures on EP claims.

  3. Outside-front— The following items, if applicable, should be stapled to the outside-front of the Lead Exam File and Primary Related Exam Files, from top to bottom:

    • Form 10329

      Note:

      It should list not only the return in the folder but also all related exams.

    • Form 895-EP

      Note:

      All entries on the Form 895-EP should be completed and updated prior to closure of the case from the group.

    • Form 3198–A

  4. Inside-left — The following items, if applicable, should be stapled or clipped to the inside-left of the Lead Exam and the Primary Related Exam Files, from top to bottom:

    • Computer disks (containing the closed RGS case for a Form 1040/1120 discrepancy adjustments only)

    • Copy of Form 5666, including attachments supporting the referral

      Note:

      The original Form 5666 (with supporting documentation) should have been sent directly to EP Classification by the EP agent in accordance with IRM 4.71.6.

    • File copy of Form 5457 (when the case is being closed from Mandatory Review to ESSP)

    • File copy of Form 5456 (when the case is being closed from Mandatory Review to ESSP)

  5. Inside-right — The following items, if applicable, should be placed on the inside-right of the file in the order shown from top to bottom:

    • Form 5456 (when the case is being sent to or from Mandatory Review or Special Review as a result of a Reviewer’s Memorandum)

    • Form 5457 (when the case is being sent to or from Mandatory Review or Special Review as a result of a Reviewer’s Memorandum)

    • Form 1900, Income Tax Survey After Assignment

    • For an "Agreed" claim disallowance, a signed Form 2297, Waiver of Statutory Notification of Claim Disallowance

    • For an "Agreed" claims disallowance, a signed Form 3363, Acceptance of Proposed Disallowance of Claim for Refund or Credit

    • For an "Agreed Tax Change" (Disposal Code 03) case the signed Form 4549–E, Form 2504, Agreement to Assessment and Collection of Additional Tax and Acceptance of Overassessment, or Form 870-EP.

      Note:

      If additional excise tax or penalties are being assessed, calculations should be included.

    • Amended return, Form 843, Claim for Refund and Request for Abatement, or any informal claims

  6. For "Unagreed" cases closed from the group to Mandatory Review, the following items should be clipped together in one package and placed on the inside-right of the case file:

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

    • Form 2297, Waiver of Statutory Notification of Claim Disallowance

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

    • The Revenue Agent Report (RAR)

    • File copy of the closing letter indicating, "Copy - Letter Sent to Taxpayer"

  7. For the guidance in assembling the closing document and subject return package refer to IRM 4.71.12.3 above.

4.71.12.6.1  (07-17-2014)
Workpapers Organization for Claims Files

  1. All workpapers should be rubber-banded or clipped together and placed in the order below from top to bottom as described in IRM 4.71.12.4 above.

  2. Workpapers must be indexed to the Form 5772.

  3. Nothing should be marked to purge. EP agents themselves should purge any documents that are duplicates, immaterial and/or not substantive to the examination issues.

  4. All correspondence and information prepared for and transmitted to the taxpayer must be saved.

  5. The following items should be included as part of the workpapers:

    • Form 5772

    • Form 5773

      Note:

      Form 5773 is optional only if all examination findings are documented within the workpapers.

    • File copy of the Revenue Agent Report (RAR)

    • Form 5464

    • Form 5666 (file copies of Forms 5666 both sent and received including any attachments)

    • Correspondence between the Service and the taxpayer assembled in chronological order with the most recent letter on top (initial contact letter at the bottom)

    • Prints of the most recent IDRS research

    • Miscellaneous items


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