5.9.19  Insolvency Disclosure and Telephone Procedures

Manual Transmittal

November 15, 2011

Purpose

(1) This transmits a revised IRM 5.9.19, Insolvency Disclosure and Telephone Procedures, with table of contents, text, and exhibits.

Material Changes

(1) Editorial changes have been made throughout the IRM, and cross-references have been updated.

(2) Organizational titles have been updated.

(3) Emphasis has been added to 5.9.19.1(10) that the Service is not required to disclose prepetition returns to the trustee.

(4) Discussion of "cause and cure" in 5.9.19.2(1) has been modified to conform with other IRM provisions requiring that discussion include a clear action date and a discussion of the consequences for failing to meet the action date.

(5) Note has been added to 5.9.19.2(1) that "cause and cure" discussion should be held with debtor during in-person meetings.

(6) Caution has been added to 5.9.19.2(1) that action date set during "cause and cure" discussion should not conflict with any dates set in written correspondence.

(7) The toll-free telephone number for the CIO has been changed to the current number in 5.9.19.2(3).

(8) A new paragraph has been added as 5.9.19.2(5) to detail the calls to be taken by Field Insolvency in Chapter 7 Asset cases.

(9) 5.9.19.2(4) was renumbered as 5.9.19.2(5) and was modified to detail the calls to be taken by Field Insolvency in Chapter 7 No Asset and Chapter 13 cases.

(10) 5.9.19.3.2(2) and (3) were modified to clarify the roles of Field Insolvency and the CIO in responding to case specific issues.

(11) 5.9.19.3(3) has been modified to include filing status on the return in question as one of the items for taxpayer verification.

(12) 5.9.19.3(3) has been modified to add a note with cross-references to IRM 21.1.3.2.3 and 21.3.2.4 on procedures to follow in the event that the employee is unable to verify all required items.

(13) 5.9.19.2(6) and 5.9.19.3.1(1) have been modified to clarify that the 1-800-829-1040 number is for individual accounts, and to give the telephone number for questions regarding business accounts.

(14) The Oral Statement Authority- Tolerances for the Address Change or Correction row in Exhibit 5.9.19-2 was changed to reflect the current position on accepting an oral change of address.

(15) Additional pattern letters available to Insolvency employees have been added to Exhibit 5.9.19-3, minor corrections have been made to the exhibit regarding the use of other letters.

Effect on Other Documents

This material supersedes IRM 5.9.19, dated May 16, 2008.

Audience

All Operating Divisions.

Effective Date

(11-15-2011)

Scott D. Reisher, Director
Collection Policy

5.9.19.1  (11-15-2011)
Disclosure

  1. Introduction. During the pendency of a bankruptcy proceeding, which can range from a few days to several years, IRS employees can have numerous contacts on the case. These may include oral, written, and electronic communications. Insolvency employees may also appear at § 341 meetings of creditors and give testimony in bankruptcy court.

  2. Damages/Penalties for Unauthorized Inspection or Disclosure. Service employees must not inspect or disclose confidential tax information without authorization. They must be aware of disclosure laws and the nature of information permitted to be disclosed and to whom it may be disclosed. Unauthorized inspection or disclosure of returns or return information may result in civil damages against the United States (IRC § 7431) and/or criminal penalties against the individual who inspected or disclosed the information (IRC §§ 7213 and 7213A).

  3. Statutory Authority. IRC § 6103 contains specific provisions forming the statutory framework for disclosures authorized in the bankruptcy context.

  4. Tax Administration. Significant differences exist in the disclosure rules depending upon whether or not a proceeding pertains to tax administration as defined in IRC § 6103(b)(4).

  5. General Rule. A bankruptcy case should be considered a proceeding pertaining to tax administration if the bankruptcy court’s jurisdiction is properly invoked in any manner to determine a tax matter, and the federal government and the debtor are properly before the court.

    Example:

    The debtor’s listing the IRS as a creditor in the petition or in an attached schedule of liabilities, or the IRS’s taking formal action, such as filing a motion to compel filing of a tax return, are examples of proceedings pertaining to tax administration. Another example is the IRS’s filing a proof of claim for taxes owed even though the debtor failed to list the IRS as a creditor in the debtor’s schedules filed with the bankruptcy court.

  6. Certain Disclosures Allowed. Under the rules of IRC § 6103(h)(2) and (4), if a bankruptcy case pertains to tax administration, certain disclosures of the debtor’s tax information are permitted to the court, to the Department of Justice, to case trustees (including the standing Chapter 13 trustee), or to any other party to the proceeding. Such disclosures generally do not require the debtor’s consent.

    Caution:

    Disclosures of the debtor’s return information under IRC § 6103(h)(2) and (4) should be limited to information directly related to the tax matter at issue. Third party return information should be disclosed only if it satisfies the "item" or "transaction" test. See IRM 11.3.22.12.1.2, I.R.C. § 6103(h)(2)(B) and (h)(2)(C) and IRM 11.3.22.17, Disclosure of Returns and Return Information in Judicial and Administrative Tax Proceedings.

  7. Non-Tax Administration. If a bankruptcy case does not involve tax administration, the debtor’s tax information usually can be disclosed only:

    1. with the debtor’s consent;

    2. to a Chapter 7 or 11 case trustee if requested in writing pursuant to IRC § 6103(e)(4), (5), or (7); or

    3. in a criminal proceeding pursuant to IRC § 6103(i).

      Note:

      Caseworkers must determine if a particular bankruptcy case or proceeding pertains to tax administration. Not every bankruptcy case meets the definition of a tax administration case.

  8. Disclosure and Debtor’s Attorney. In a bankruptcy proceeding involving the tax liabilities of a debtor, the IRS may disclose to the debtor’s attorney of record the debtor’s return information relevant to the resolution of those tax matters affected by the proceeding ( IRC § 6103(e)(6)). An attorney becomes the debtor’s attorney of record by filing the bankruptcy petition or otherwise entering an appearance before the court in the bankruptcy case.

  9. Verification of Representation. During the term of a bankruptcy case, a debtor may change legal representation. IRS caseworkers must verify the attorney contacting the Service on the debtor’s behalf is indeed the debtor’s current attorney of record. If doubt exists that the bankruptcy petition has been filed or that the representative is currently the attorney of record, Service employees must probe the contact to establish those facts or obtain a valid consent from the debtor prior to making a disclosure, when the bankruptcy is a proceeding relating to tax administration.

  10. Disclosure and the Trustee. Under IRC § 6103(h)(4), Insolvency may disclose tax information to the trustee assigned to the bankruptcy as long as the information is directly related to the Service’s prepetition or § 1305 claim. For example, Insolvency may consult the trustee to determine if the trustee will allow modification of the plan to accommodate payment of a § 1305 claim. Insolvency may not discuss full paid prepetition tax periods for which no claim has been filed unless the debtor consents. BAPCPA gives the trustee the right to review certain prepetition returns filed by the debtor, but it is the debtor, not the Service, who is required to provide those returns and return information.

    Note:

    Disclosure to a trustee’s employees is not allowed unless the debtor has provided consent for such disclosure.

  11. Disclosure and Debtor’s or Attorney’s Accountant. The debtor or the debtor’s attorney of record may request that the IRS discuss the debtor’s tax information with an accountant. Disclosure is not proper under those circumstances unless the debtor has signed a valid power of attorney appointing the accountant as his or her representative or unless the debtor has provided a valid written or oral consent (Treas. Reg. § 301.6103(c)-1.). Form 2848, Power of Attorney and Declaration of Representative, may delegate authority to the attorney to add or substitute the accountant as an additional representative or permit the attorney to execute consents to disclose to the accountant.

  12. Disclosure and the § 341 Meeting. The first meeting of creditors (the 341 meeting) is held shortly after the debtor files a bankruptcy petition (11 USC § 341). The debtor is examined under oath by creditors and the trustee.

    1. An IRS employee may attend the 341 meeting to gain information concerning tax compliance (e.g., unfiled tax returns or potential responsibility for unpaid trust fund taxes).

    2. If the IRS is listed as a creditor in the debtor’s schedules, the IRS may disclose in the 341 meeting the debtor’s return information to the extent necessary to examine the debtor (IRC § 6103(h)(4)).

    3. If the IRS is not listed in the schedules and the Service has not yet filed a proof of claim, the IRS may exhibit general familiarity with the debtor’s tax history in examining the debtor, providing the disclosure is necessary to obtain information not otherwise reasonably available (IRC § 6103(k)(6)).

      Caution:

      In all of these situations, questions must be posed so only necessary information is disclosed by the IRS.

  13. Disclosure Resources. Insolvency employees should be familiar with Chapter 6 of the Disclosure & Privacy Law Reference Guide, Publication 4639 available on the IRS website at http://www.irs.gov/pub/irs-pdf/p4639.pdf. It provides information on disclosure and bankruptcy. Also, they should refer to relevant statutes in the Internal Revenue Code, including §§ 6103, 1398, 1399, 7213, 7213A, 7401, 7431, and 7602; IRM 11.3, Disclosure of Official Information; and relevant statutes contained in the Bankruptcy Code.

    Note:

    If IRS employees face specific disclosure issues not covered in any of the above references or need interpretative help, they should contact their local Disclosure Office.

5.9.19.2  (11-15-2011)
Field Insolvency Phone Calls

  1. Cause and Cure. Because of the large geographic areas handled by Field Insolvency specialists and advisors, most of their contacts with debtors and debtor's attorneys are by telephone. In addition to securing returns or return information, determining the feasibility of a plan, or collecting postpetition taxes, the caseworker must attempt to identify the primary cause of a debtor's noncompliance and educate the debtor or the debtor's representative on how to remain compliant with future filing and payment obligations. If the case worker requests that the debtor or debtor's representative provide information or complete an action, the caseworker should communicate a reasonable and clear action date, and advise of any potential consequences if the action date is missed.

    Note:

    This requirement to discuss "cause and cure" also applies to in-person meetings with the debtor or debtor's representative, such as 341 meetings or office appointments.

    Caution:

    Any action dates set orally should not conflict with dates set in letters or other correspondence, such as Letter 1714.

  2. Caller Identification. Field Insolvency personnel are bound by the same disclosure procedures for identifying callers as are the phone assisters at the Centralized Insolvency Operation (CIO). (IRM 5.9.19.3, CIO Telephone Procedures, and Exhibit 5.9.19-1.)

  3. Call Referral. For call inquiries received in the Field Insolvency offices on cases assigned to the CIO inventory, the callers should be referred to the toll-free phone unit in Philadelphia at 1-800-973-0424 unless the inquiries fall under the umbrella of complex case issues as outlined in IRM 5.9.1.3(3) , Complex Issues. Field specialists or advisors must work calls on complex issues.

  4. Chapter 7 Asset Calls. Field specialists and advisors will work calls received on Chapter 7 Asset cases assigned to them, and will handle calls on cases assigned to the CIO if a complex issue is involved. CIO will take calls on Chapter 7 Asset cases assigned to CIO caseworkers, but will refer complex questions to a field specialist or advisor.

  5. Chapter 7 No Asset and Chapter 13 Calls. Field specialists and advisors will answer questions received on Chapter 7 No Asset cases and Chapter 13 cases assigned to the Field Insolvency inventory. CIO will handle questions received on Chapter 7 No Asset and Chapter 13 cases assigned to the CIO inventory, unless the inquiry concerns a post-petition liability or is deemed a complex issue. CIO will handle calls involving general payment questions. CIO will also handle questions regarding a Chapter 13 debtor's eligibility to enter into an Installment Agreement for post-petition debt, using the tool Installment Agreement Requests When in a Chapter 13 Bankruptcy, http://serp.enterprise.irs.gov/databases/who-where.dr/cio_assignment.dr/chptr_13_post_pet_ia_req.htm, available on SERP. For other post-petition or complex issues, the assister must provide the caller with the phone number for the appropriate Field Insolvency specialist. Field specialists and advisors will handle inquiries involving complex issues.

  6. Chapter 9, 11, 12, and 15 Calls. Field Insolvency must take all calls concerning Chapter 9, 11, 12, and 15 insolvency issues even if no bankruptcy has been filed.

  7. Non-Insolvency Calls. When Field Insolvency receives a call on a case in its inventory, but the issue is not bankruptcy-related (e.g., math error), the specialist or advisor should refer the caller to the toll-free number 1-800-829-1040 for individual accounts or to toll-free number 1-800-829-4933 for business accounts. If a call has been received completely in error but falls under the purview of another IRS function, the specialist or advisor must research SERP to provide the taxpayer with a correct contact number.

    Caution:

    "Internal use only" phone numbers are not to be given to the public.

5.9.19.3  (11-15-2011)
CIO Telephone Procedures

  1. Overview of Response to Incoming Calls. The technical units handle bankruptcy calls concerning Chapter 7 No Asset and Chapter 13 issues in the CIO inventory unless the inquiry concerns a complex issue.

  2. Phone Processing Steps. The phone processing steps are an overview of the methods CIO technicians will use to respond to incoming calls. Processing steps include:

    1. Call Identification. Identifying the type of call: general Insolvency questions, non-Insolvency questions, case-related Insolvency questions or complex issues.

    2. Servicewide Electronic Research Program (SERP). Researching SERP to provide caller with correct contact number regarding non-Insolvency questions.

    3. Bankruptcy Law Advisory Research Engine (BLARE). Using electronic research tools to provide caller with correct information regarding general Insolvency questions.

    4. Insolvency Case Assignment Tool. Accessing web site http://serp.imt.irs.gov/cgi-bin/AISCT_Search.cgi to provide the caller with correct contact numbers for the assigned employee regarding Chapter 9, 11, or 12 case-related questions, Chapter 7 Asset questions on cases assigned to Field Insolvency, pre-confirmation Chapter 13 questions, or complex issues.

    5. Disclosure. Performing disclosure inquiries for callers requesting specific case information relating to bankruptcy and/or taxes.

    6. Integrated Data Retrieval System (IDRS) Research. Researching IDRS to find specific taxpayer account information for Chapter 7 No Asset or 13 case-related questions pertaining to cases in the CIO inventory.

    7. Response to Caller. Responding to the caller with information needed to resolve Chapter 7 No Asset or 13 case-related questions.

    8. Written Responses. Requests from callers for responses in writing can be provided using the programmed letters on AIS or SERP. (Exhibit 5.9.19-3.) Ad hoc letters may be prepared under management supervision. Counsel approval may be required for ad hoc letters.

    9. On-line Adjustments. Inputting bankruptcy-related on-line adjustments to debtors' accounts if necessary, using appropriate IDRS command codes while the caller is on the phone. (See Exhibit 5.9.19-2.)

    10. Additional Actions. Taking additional actions as needed (e.g., referrals, manual refund requests, corrections of stay violations, callbacks and case documentation).

    11. Complex Issues. Referring to IRM 5.9.1.3(3), Complex Issues, to identify which calls should be handled by a Field Insolvency specialist. The phone assister must provide the caller with the correct contact number of the assigned employee with regard to complex issues. In addition the CIO assister must annotate the AIS history with the caller's phone number and the best time to call the debtor.

    12. Calls Unrelated to Bankruptcy. Researching SERP to provide taxpayers with a correct contact number when non-Insolvency calls are received at the CIO call site.

      Caution:

      "Internal use only" phone numbers are not to be given to the public.

  3. Taxpayer Verification. Before divulging taxpayer information, the phone assister must verify the caller is in fact the debtor by verifying the debtor's name, TIN, address, filing status on the return in question, and date of birth. This information can be found using CC INOLES on IDRS. If the caller is asking for non-case specific bankruptcy information, taxpayer verification is not needed.

    Note:

    If the assister is unable to verify any of this information, the assister should follow the specific instructions outlined in IRM 21.1.3.2.3, Required Taxpayer Authentication, and IRM 21.1.3.2.4, Additional Taxpayer Authentication.

  4. Contacts with Trustees. Most contacts with a trustee are not considered third party contacts under IRC § 7602(c) while the bankruptcy case is pending as long as the contact relates to matters and issues involved in the bankruptcy case. Before speaking with a trustee, the caseworker should verify the trustee information on AIS. If a trustee's phone call covers several cases, full verification of trustee information need only be completed for the first case. Once the trustee's identity is confirmed, for subsequent cases the assister may simply verify the trustee on the phone is handling each case (s)he is referencing by checking AIS information. No disclosures of the debtor's return information may be made to the Chapter 13 trustee or to the U.S. Trustee unless the bankruptcy is a proceeding pertaining to tax administration or the debtor taxpayer has authorized the disclosure.

    Note:

    Contacting a trustee about payment issues after the court closes the bankruptcy case is allowed.

  5. Attorney of Record. Contacting the attorney of record for the debtor is not considered a third party contact while the case is open and under the jurisdiction of the bankruptcy court. The contact must be confined to issues affecting the bankruptcy filing.

  6. Other Contacts. IRM 21.1.3.4, Other Third Party Inquiries, provides information on third party contacts.

5.9.19.3.1  (05-16-2008)
General Insolvency Call Issues

  1. Procedural Questions. CIO technicians should respond to general Chapter 7 No Asset and Chapter 13 insolvency questions using available resources without accessing AIS or IDRS. If a query is about basic bankruptcy concepts and is not case-specific, the phone assister should refer to the Bankruptcy Code, the IRM, or BLARE. For non-bankruptcy issues, such as correcting a math error or effecting a credit transfer, the technician should refer the caller to the toll-free number 1-800-829-1040 for individual taxes or toll free number 1-800-829-4933 for business taxes.

5.9.19.3.2  (11-15-2011)
Case-Specific Insolvency Issues

  1. Chapters 9, 11, 12, or 15 Calls. If a caller to the toll-free line asks either general or case-specific questions concerning a Chapter 9, 11, 12, or 15 bankruptcy, the phone assister will provide the caller with the phone number of the appropriate Field Insolvency caseworker by using the Insolvency Case Assignment Tool on SERP. If a case is open on AIS, the assister must complete an AIS history documenting receipt of the call and the caller's phone number with a best time to call. (IRM Exhibit 5.9.11-1, Accessing a Case on AIS.) If a caller declines to give a phone number or best time to call, the AIS history should reflect that fact.

  2. Chapter 7 Asset Calls. After the caller's identity has been confirmed, CIO employees will answer all questions for Chapter 7 Asset cases assigned to the CIO, unless a complex issue is involved as outlined in IRM 5.9.1.3(3), Complex Issues. If the case is assigned to a Field Insolvency employee or involves a complex issue, the CIO assister will provide the caller with the phone number of the appropriate Field Insolvency specialist or advisor. If the case is still open on AIS, the assister must enter in the AIS history the receipt of the call, the caller's phone number and the best time to call.

  3. Chapter 7 No Asset or 13 Calls. After confirming the caller's identity, CIO phone assisters will answer all questions on Chapter 7 No Asset or 13 questions for cases assigned to the CIO inventory unless the inquiry concerns a post-petition liability or is deemed a complex issue. CIO will handle calls involving general payment questions. CIO will also answer questions regarding a Chapter 13 debtor's eligibility to enter into an Installment Agreement for post-petition debt, using the Installment Agreement Requests When in a Chapter 13 Bankruptcy tool, located on SERP at http://serp.enterprise.irs.gov/databases/who-where.dr/cio_assignment.dr/chptr_13_post_pet_ia_req.htm. For other post-petition or complex issues, the assister must provide the caller with the phone number for the appropriate Field Insolvency specialist. Once the call has been determined to be a case-specific question on an account assigned to the CIO and not a complex issue, the phone assister must ensure the caller is the debtor or has proper disclosure authorization. (See Exhibit 5.9.19-1 ,Disclosure Chart.)

    Reminder:

    Matters not involving tax administration cases cannot be disclosed to a third party without a taxpayer’s oral or written consent.

    IF... THEN...
    the caller is not authorized to receive information, advise the caller the debtor must submit a completed Form 2848 or Form 8821 allowing disclosure of tax information to a third party, or have the caller call back with the debtor on the line, at which time the debtor can give oral permission to disclose tax information to the third party.
    Caution: Form 8821 does not authorize the third party named to represent the taxpayer.
    the issue is complex, provide the caller with the telephone number of the Field employee assigned the case. Document the AIS history. IRM 5.9.1.3(3) lists complex issues.

5.9.19.3.3  (05-16-2008)
Bankruptcy Law Advisory Research Engine (BLARE)

  1. Automated Phone Guide. Phone assisters at the CIO use BLARE, an automated research engine, to arrive at logical answers to commonly asked questions. Used in conjunction with the IRM and the Bankruptcy Code, BLARE provides assisters with sufficient information to respond to most Chapter 7 No Asset and Chapter 13 queries. Topics accessible through Blare are:

    • disclosure

    • dischargeability

    • community property

    • liens

    • levies

    • local rules

    • non-debtor spouse

    • offers in compromise

    • pay off amounts

    • plans

    • proofs of claim

    • refunds

    • seizures

    • stay violations

    • Associate Area Counsel

    • installment agreements

  2. Updates. The data on BLARE can be updated on short notice by the CIO quality analysts after approval from an IRS panel made up of representatives from Counsel, Policy, Field Insolvency, and the CIO. All of the responses on BLARE are consistent with policy and procedures found in IRM 5.9.

5.9.19.4  (03-01-2007)
Secondary Issues

  1. Bankruptcy Case-Related Issues. Secondary issues may arise in the process of answering or resolving bankruptcy case-related issues. If the information in the AIS case history is insufficient to satisfy the caller’s request or resolve the issue, the phone assister should obtain the contact number for the assigned employee, either from AIS or from the Insolvency Case Assignment Tool on SERP, and give the information to the caller. CIO assisters must annotate the AIS history with receipt of the call, the caller's phone number and the best time to call.

  2. Resolve Issue. While helping debtors with their bankruptcy issues, secondary issues may arise requiring adjustments/corrections on their accounts. Exhibit 5.9.19-2 lists common adjustment requests. Any adjustment requests not made in writing must meet Oral Statement Authority, and tolerances must also be considered by both Field Insolvency and CIO caseworkers. Management must ensure required security measures are in place regarding on-line IDRS adjustments.

5.9.19.5  (03-01-2007)
Documentation of Phone Calls

  1. Required Annotations. Mandatory AIS documentation of phone calls generally applies to both Field Insolvency and the Centralized Insolvency Operation.

  2. Live Phone Calls on Specific Cases. When a debtor, a debtor’s representative, or third party (which can include another IRS employee) phones an Insolvency employee, the AIS history for the case in question must include the identity of the caller, a statement that a disclosure probe was completed, the nature of the call, and any resolutions, agreements, or unresolved issues brought to light because of the phone conversation. If the CIO refers a caller to a Field Insolvency caseworker, the CIO assister must annotate the AIS history with the receipt of the call, the caller's phone number and the best time to call.

  3. General Phone Calls. If a call is received asking general bankruptcy information, absent any direction from management to the contrary, no history record need be kept of that phone call.

  4. Phone Messages. Caseworkers are expected to return phone messages within one workday of receipt. Unsuccessful attempts to return a call must be documented in AIS. The documentation should be brief. If a message is left for a debtor, debtor’s representative, or third party on voice mail or an answering machine, the message cannot disclose any taxpayer information.

  5. Out Calls. If an Insolvency caseworker calls a debtor, debtor’s representative, or third party, the caseworker must confirm the identity of the party taking the call to protect against inadvertent disclosure of tax information. The disclosure review must be documented in the AIS history. This direction applies both to returned phone messages and calls initiated by the caseworker.

Exhibit 5.9.19-1 
Disclosure Chart

Note: Information can be received from a third-party. (See IRM 11.3.2.2, General Rules.)

Stakeholder Disclosures Permitted Disclosures NOT Permitted
Debtor All matters regarding tax returns signed by the debtor
(IRC § 6103(e)(1)) and IRC § 6103(e) (7). Requests for return copies must be in writing ( IRC § 6103(e)). (See IRM 11.3.2.3,Processing Requests for Returns and Return Information.)
Information regarding criminal investigations by Criminal Investigation (CI) if acknowledging the existence of an investigation will impair tax administration. (See IRM 11.3.2.2, General Rules, and IRC § 6103(e)(7))
Caution: Existence of a CI investigation can be neither confirmed nor denied unless CI authorizes otherwise. No representations should be made that an investigation is not currently being conducted if the opposite is known to be true.
Non-debtor spouse Only matters on returns signed by the non-debtor spouse
(IRC § 6103(e)(1)(B)).
All tax return information separately filed by the debtor where the debtor has not given oral or written consent. This includes data available on IDRS through CC IRPTR such as Forms 1099, W-2’s, etc. (See the example in IRM 11.3.2.4.1(2), Individuals.)
Attorney All matters of tax administration cases for the debtor for which the attorney is named representative, generally prepetition returns and return information. (See IRM 11.3.3.1.6(4), Disclosure to an Attorney-in-Fact). The "representative" requirement is considered to be met by the attorney’s entry of an appearance in the bankruptcy proceeding, by the signing of the petition, or for which the attorney has a valid Form 2848. Attorneys are not allowed to receive information on any return due and owing after the petition date unless the debtor has given oral or written consent, or unless an issue arises regarding postpetition taxes before the bankruptcy court (e.g., a 1305 claim has been filed) and the attorney is representing the debtor with respect to postpetition tax issues. Additionally, once the bankruptcy is discharged, dismissed or closed by the court and ceases to be a matter of tax administration, the bankruptcy attorney ceases to be the attorney of record. He may not then receive information without the debtor’s express oral or written consent even if the information related to tax periods or matters clearly administered by the bankruptcy court.
Attorney’s representative NONE, with the following exception:
Item 5 of Form 2848 allows a "write-in" for re-designation of authority to allow the holder of Form 2848 to re-designate his authority to others.
Aside from the debtor’s attorney, no disclosure of the debtor's return information made be made to employees of the law firm representing the debtor unless the debtor has given oral or written consent with the exception annotated in the box to the left.
Form 8821, item 2, permits the debtor to directly delegate authority to employees of the firm to receive tax information, but not to act on the debtor’s behalf.
CPA/Tax Preparer NONE, with the following exception:
Returns can permit "Check the Box" authorization to be extended to a third-party designee, which can include a preparer. However, the "Check the Box" authorization ends after the return is processed or by the return due date, without regard to extensions, whichever is earlier.
For bankruptcy purposes, the CPA/Tax Preparer of the debtor’s tax returns is not permitted to receive any disclosure of tax return information unless the debtor has given oral or written consent. See IRM 11.3.2.5.2,Preparers, for exceptions outside the scope of bankruptcy.
Trustee In a bankruptcy proceeding pertaining to tax administration, prepetition returns and return information pertaining to the debtor or bankruptcy estate may, upon written request, be disclosed to the trustee. Also, in cases where the trustees have fiduciary responsibility, hence a material interest, to prepare returns and pay taxes (tax administration purposes), they have authority for access to the same, irrespective of whether the return is pre or postpetition. (See IRC § 6103(e)(4), (5), and (7);IRC § 6103(h)(4); and IRM 11.3.2.4.12, Bankruptcies. )
Note: In involuntary bankruptcies, no disclosure may be made to the trustee until the order for relief has been entered or unless the court finds that such disclosure is necessary for purposes of determining whether an order for relief should be entered ( IRC § 6103(e)(5)(C)).
Trustees are not allowed to receive information on any tax returns for periods after the petition date unless the debtor has given oral or written consent, except for claims filed in Chapter 13 cases under § 1305, or for tax obligations incurred postpetition, while the trustee is operating the debtor’s business. IRC § 6103(e) generally does not permit disclosures to the United States Trustee or the standing Chapter 13 trustee; however, such disclosures may be permitted in the context of a judicial proceeding if the bankruptcy case pertains to tax administration.
Other third-party NONE, generally; however, see IRM 11.3.2.2(4), General Rules, and IRC § 6103(k)(6) disclosure for investigative purposes and IRC § 6103(h)(4), disclosure in an administrative or judicial tax proceeding. Other third parties may receive the debtor’s return information if they have sufficient material interest, pursuant to IRC § 6103(e). (See IRM 11.3.2.2(3), General Rules.) Generally, third-parties are not allowed to receive tax return information unless the debtor has given oral or written consent.
Holder of a Form 2848, Power of Attorney and Declaration of Representative(POA) POAs are allowed to receive tax returns and return information only for the tax periods listed on the Form 2848. POAs are not allowed to receive tax returns or return information for any tax periods not listed on the Form 2848, unless the debtor has given oral or written consent.
Corporate officers May receive tax returns and return information of corporations for which they signed the tax return in question, or have the authority legally to bind the corporation in accordance with state law, and are still employed by the corporation in the same capacity and with the same authority. (See IRC § 6103(e)(1)(D) and IRM 11.3.2.4.3, Corporations.) May not receive returns or return information if no longer employed by the corporation or if no longer a current corporate officer.
Partners May receive tax returns and return information on partnerships for which they were a general or limited partner of the partnership during any part of the period covered by the return. (See IRM 11.3.2.4.2(1), Partnerships.) May not receive information on individual income tax returns of the partners or returns or return information of the partnership for which a Schedule K-1 was not filed for the person requesting the disclosure or for which the person was not a general or limited partner of the tax return period in question. (See IRM 11.3.2.4, Partnerships.)
US Bankruptcy Court All matters in tax administration cases of the debtor or bankruptcy estate, generally prepetition returns and return information to the extent authorized by IRC § 6103(h)(4). (See
IRM 11.3.22, Disclosure to Federal Officers and Employees for Tax Administration.)
With the exception of matters concerning administrative expenses and § 1305 claims, the bankruptcy court is generally not allowed to receive information on any tax returns due and owing after the petition date unless the debtor has given oral or written consent.
Chief Counsel May receive returns and return information on cases currently in litigation, in anticipation of litigation, and for purposes of issuing a legal or technical opinion or as otherwise needed for a tax administration purpose in the course of official duties. (See IRM 11.3.22.6, Access by Employees of the Office of Chief Counsel, and IRC § 6103(h)(1).) Tax return information may not be disclosed to Chief Counsel employees who do not have a need to know the information to perform their official duties.
AUSA/DOJ May receive returns and return information on cases currently in litigation, in matters of tax administration if the taxpayer is a party to the proceeding, or the proceeding arises out of, or in connection with, determining the taxpayer's civil or criminal liability, with respect to tax. Third-party return information may also be disclosed if the item or transaction test of IRC § 6103(h)(2)(B) or (C) is met. (See IRM 11.3.22.12.1, What May be Disclosed, and IRC § 6103(h)(2)(A). ) AUSA/DOJ cannot receive tax return information on cases that have not been referred to them as matters of tax administration (IRC § 6103(h)(2) and (3)).
In non-tax criminal matters, such as bankruptcy fraud, requests from AUSA/DOJ should be referred to the Disclosure Officer per IRC § 6103(i).
Internal IRS employees May receive returns and return information on a need-to-know basis where the employee's official duties require such disclosure. This may include a manager, a lead, or an OJI. (See IRM 11.3.22.4.1, Access by IRS Employees Based on "Need to Know," and IRC § 6103(h)(1) .) Tax return information may not be disclosed to IRS employees who do not have a need to know the information to perform their official tax administration duties.
Form 8821, Tax Information Authorization Holders of Form 8821 are allowed to receive tax return information only for tax periods listed on the Form 8821. Form 8821, line 3, column d, lists restrictions. If nothing is listed in column d, then any information may be disclosed within the limits of the Form, column b, and Period, column c. Holders of Form 8821 are not allowed to represent the debtor before the IRS, nor receive copies of returns without an accompanying written request for Form 4506, Request for Copy of Tax Return, or Form 4506T, Request for Transcript of Tax Return.

Disclosure References are:

  • IRM 21.1.3.3, Third Party (POA/TIA/F706) Authentication

  • IRM 21.1.3.2.4, Additional Taxpayer Authentication

  • IRM 21.1.3.6, E-file PIN's and Form 8453 (U.S. Individual Income Tax Transmittal for an IRS e-file Return)

  • IRM 11.3, Disclosure of Official Information

  • IRM 11.3.2, Disclosure to Persons with a Material Interest

  • IRM 11.3.3, Disclosure to Designees and Practitioners

  • IRM 11.3.22, Disclosure to Federal Officers and Employees for Tax Administration Purposes

  • Bankruptcy Disclosure Handbook, Document 9225

  • IRC § 6103

Exhibit 5.9.19-2 
Common IDRS Adjustments

ADJUSTMENT IRM REFERENCES ORAL STATEMENT AUTHORITY - TOLERANCES
Address Change or Correction • IRM 25.15.7.5.2.4.4, ENMOD
• IRM 3.13.5.16, Domestic Changes Received
•IRM 3.13.5.16.1, Updating Address Records
• IRM 3.13.5.12, Address Changes from Oral Statements
• IRM 3.13.5.12.1, Oral Address Procedures for Completing a New Address
An oral address change can be made if the necessary verification is provided. If the required verification cannot be provided, the taxpayer must provide a Form 8822, Change of Address, before the address can be changed. When an address is updated through an oral statement, advise the taxpayer to also change their address with the local United States Post Office.
Name Correction • IRM 25.14.7.5.2.4.4, ENMOD
•IRM 3.13.5.16, Address Changes Received
NOT APPLICABLE
Credit Transfer • IRM Exhibit 21.5.8-1, Transaction Codes and Reversals
• IRM 21.5.8, Account Resolution, Credit Transfers
•IRM 2.4.17, Command Codes ADD24/34/48, ADC24/34/48, FRM34 and DRT24/48
There are no oral statement ceiling amounts/dollar limits, but credits must be available for transfer on IDRS.
Installment Agreements, Reinstatements, Revisions, Extension of Time to Pay • IRM Exhibit 5.19.1-5, IDRS Input of Full Pay Agreements, 120 Days or Less, CC IAREV for AM/ACS/ACSS/CSCO/
FA

• IRM Exhibit 5.19.1-6, IDRS Input of Installment Agreements, CC IAORG
• IRM Exhibit 5.19.1-7, IDRS Input of Installment Agreements CC IAREV
• IRM Exhibit 5.19.1-8, IDRS Input of Pre-assessed IAs and Extensions
Streamlined installment agreement criteria for dollar amounts and time limits are in effect. (See IRM 5.14.5.2, Streamlined, Guaranteed and In-Business Trust Fund Express Installment Agreements.)
Transcript Request MFTRA-X
IRM Exhibit 2.3.32-2, Command Code MFTRA Input Examples - Request Types
NOT APPLICABLE
Correct Unpostables • IRM 2.12.32, General Unpostables
• IRM 3.12.32.22, General Information for GUF Command Code Screen Formats
• IRM Exhibit 2.3.37-1, Input Display UPTIN
• IRM 21.5.5, Unpostables
• IRM 21.5.5.3.2, Researching Unpostables on IDRS
NOT APPLICABLE
Input/Reverse TC 520 • IRM 5.9.5.6, Bankruptcy Freeze Code (TC 520)
• IRM 5.9.5.6.1, Closing Codes
• IRM 5.9.5.6.2, Reversing the Bankruptcy Indicator
• IRM 5.9.17.17, Reversal of Freeze Codes (TC521)
• IRM 5.9.17.2, Lift of Stay and Reversing the Bankruptcy Freeze
• IRM 2.4.19, Command Codes REQ77, FRM77 and FRM7A
NOT APPLICABLE
Input TC 971 • IRM 5.9.17.22, Adjustment Methods for Discharged Liabilities
• IRM 21.5.1.4.8, Transaction Code 971
• IRM 2.4.19, Command Codes REQ77, FRM77 and FRM7A
NOT APPLICABLE
IDRS History Items • IRM Exhibit 2.3.12-1, ACTON Input Format
•IRM 21.2.2.4.2.1, IDRS History Items and Account Inquiry
NOT APPLICABLE
Delete Adjustment Inputs (same-day) • IRM Exhibit 2.4.13-2, Input Format, CC TERUPC NOT APPLICABLE
Control Bases • IRM Exhibit 2.3.12-1, ACTON Input Format
• IRM 21.2.2.4.2, IDRS Case Controls
NOT APPLICABLE
Closing TDI • IRM 5.19.2.6.9.3, Resolving TDI Research (TC 594/599) Transcripts NOT APPLICABLE
Dummy Module • IRM 21.2.2.4.4.1, Taxpayer Information File (TIF)
•IRM 2.3.12.2, Case Control Using Command Code ACTON
NOT APPLICABLE
Stop Refunds • IRM 21.4.1.4.10, Refund Intercept CC NOREF
• IRM 21.4.5, Erroneous Refunds
NOT APPLICABLE

The IDRS Command Codes Job Aid on SERP provides directions for IDRS inputs.

Oral Statement Authority is explained in IRM 21.1.3.20.

Tolerances are given in IRM 21.5.1.4.12.

Exhibit 5.9.19-3 
Approved Insolvency Letters

Letters to Debtors and Third Parties. The following table lists Insolvency letters by number and explains their uses.

Letter # Title To CH CC Originator
982 Fiduciary Pmt of Claim TTEE 11 N/A Field Specialist/Advisor
983 Closed POC TTEE 13 Debtor & Atty CIO Technician
984 Will Claim Be Paid TTEE 7A N/A Field Specialist/Advisor
986 Fiduciary Responsibilities TTEE 7,11 N/A Field Specialist/Advisor
985 POC Acknowledgement Court 11, 7A, 12, 13 N/A Field Specialist/Advisor
1714 Request for Missing Tax Returns Debtor 7A, 11,12, 13 N/A Field Specialist/Advisor
2173 Adequate Protection Debtor 11, 13 Atty Field Specialist/Advisor
3923 Delinquent Plan Pmt Debtor 11 TTEE Field Specialist/Advisor
3924 FTD Letter Debtor 11 N/A Field Specialist/Advisor
3925 Plan and Disclosure Request Court 11 Atty Field Specialist/Advisor
3926 Plan Status Letter TTEE 13 N/A CIO Technician
Debtor 11 N/A Field Specialist/Advisor
3927 Post Petition Liability Debtor 13 N/A CIO Technician
3928 Request for Business Info TTEE Debtor 13, 7A Atty CIO Technician
Debtor 11, 7A Atty Field Specialist/Advisor
3929 Stat 60 Debtor 13, 7N N/A CIO Technician
3930 Withdraw Claim Court 11, 12, 13 Atty
Taxpayer
Field Specialist/Advisor
4066 Notice of Intent to Levy CDP Rights Debtor 7N N/A Field Specialist/Advisor
4067 Notice of Intent to Levy-No CDP Debtor 7N N/A Field Specialist/Advisor
4068 Post-discharge Letter Seeking Payment Debtor 7N N/A Field Specialist/Advisor
4111 Chapter 7 Bankruptcy Balance Letter Debtor 7N N/A CIO Technician
4112 Chapter 13 Plan Balance Letter Debtor 13 N/A CIO Technician
4113 Bankruptcy Installment Agreement Letter Debtor 7,13 N/A CIO Technician
4114 Bankruptcy Discharge Determination Letter Debtor 7, 13 N/A CIO Technician
4521 Non-Debtor Spouse Letter Non-Debtor Spouse 11, 13 N/A Field Specialist/Advisor
4522 Trustee Refund Letter TTEE 7, 13 N/A CIO Technician
4553 Excluded Property Letter/Soft Notice Debtor 7N N/A Field Specialist/Advisor
4554 Excluded Property Notice of Intent to Levy Letter- CDP Rights Debtor 7N N/A Field Specialist/Advisor
4556 Excluded Property Letter - No CDP Debtor 7N N/A Field Specialist/Advisor

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