5.21.7  Special Cases

Manual Transmittal

January 03, 2014


(1) This transmits a revision of IRM 5.21.7, Special Cases, for collection employees.

Material Changes

(1) IRM is revised to add information about the use of IDRS command code IRPTRL and the E-TRAK system.

(2) IRM is added to clarify initial contact requirements for international cases.

(3) IRM is revised to improve clarity and to add information regarding Currently Not Collectible cases.

(4) This IRM section is revised to make stylistic improvements, minor grammatical corrections, update organization terms and/or titles, and correct cross references.

Effect on Other Documents

IRM 5.21.7 supersedes IRM 5.21.7, dated 8/27/2010


The target audience is revenue officers in SB/SE Field Collection (FC).

Effective Date


Dretha Barham
Director, Collection Policy  (08-27-2010)

  1. This IRM provides instructions and guidelines for working cases which have unusual international aspects that must be considered. The procedures are written specifically for international revenue officers since the collection cases involving these special issues will be assigned to them. Other employees in SB/SE and employees in other functions may also refer to these procedures.  (01-03-2014)
Cases Controlled by the Competent Authority Office

  1. The Competent Authority office (CA) works with taxpayer cases that involve coordination between IRS and another government, and they intervene at the request of the taxpayer. The purpose of their intervention is to work with the other government to prevent an unjust double taxation situation for the taxpayer.

  2. Revenue Procedure 2006-23 provides procedures for taxpayer requests for Competent Authority assistance under U.S. territory tax coordination agreements. Revenue Procedure 2006-54 provides procedures for making similar requests for assistance under tax treaties with foreign governments.

  3. Rev. Proc. 2006-23 and Rev. Proc. 2006-54 both generally provide that " the IRS will postpone further administrative action with respect to the issues under Competent Authority consideration" . This postponement would include assessment or collection procedures if they impacted the issues under the Competent Authority's jurisdiction. A large majority of these cases will involve the taxpayer's request for a determination agreement between the two governments as to his legal residency status, or some other treaty issue.

  4. Sometimes the cases being worked by CA are also assigned to a Revenue Officer (RO) - either status 26 or status 03. It is possible that the RO could pursue certain collection actions in these cases which would be counter-productive to the Service's interest or unfair to the taxpayer and, in fact, would violate the postponement guidelines in Rev. Proc. 2006-23.  (01-03-2014)
Procedures for Working Competent Authority Cases

  1. The CA analyst working the case will identify Field status via IDRS. The CA analyst will send an encrypted e-mail to the Collection Policy (CP) analyst who acts as the insular area liaison.

  2. The CA e-mail will be worded as follows:

    COMPETENT AUTHORITY NOTE: Tax years ____ and ____ are currently under the jurisdiction of the U.S. Competent Authority (SE:LB&I:IN). Pursuant to Rev. Proc. 2006-23, section 7, [or Rev. Proc. 2006-54, if applicable] "the IRS will postpone further administrative action with respect to the issues under Competent Authority consideration" such as assessment or collection procedures. Therefore, until negotiations are complete with the other taxing jurisdiction's Competent Authority, RO should contact the U.S. Competent Authority to discuss any contemplated collection action for these years before proceeding. The U.S. Competent Authority analyst on this case is ______________ and can be reached at _____________. Please make contact with this analyst as soon as possible to discuss any proposed actions on the case. You will be notified when the case is completed and Competent Authority jurisdiction relinquished.

  3. The CP analyst will copy the CA analyst's e-mail message, and paste it into the ICS history. It will be the obligation of the CA analyst to notify the CP analyst when the case is closed. The CP analyst will make a note about the closure in the ICS history.

  4. Consult your manager if you believe that postponement of collection activity will adversely impact the government's interest. If the manager agrees, the manager will contact the CA analyst to discuss the case and resolve any conflict. The CP analyst may be included in the discussion at the request of either party.  (01-03-2014)
Qualified Intermediary Cases

  1. Qualified intermediary (QI) cases are foreign entities that enter into a qualified intermediary agreement with the IRS.

  2. QIs file Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons.

  3. QIs are assigned a special QI Employer Identification Number (EIN) ranging from 98-023XXXX to 98-033XXXX.  (01-03-2014)
Procedures for Working Qualified Intermediary Cases

  1. Check IDRS command code AMDISA when there is a -L freeze on the account indicating open examination activity. If the case is assigned to a revenue agent, contact that agent before proceeding.

  2. Determine if the liability is correct and not the result of an error by the QI or IRS. QIs can claim the withholding credits even though they are not the actual withholding agent.

  3. Check Form 1042, line 66 to verify that the QI claimed the proper withholding credits. Also verify the credits in IRS systems by checking IDRS command code IRPTRL and / or Entellitrak (E-TRAK) system. The Accounts Management System (AMS) may contain some of the information you need.

  4. When ROs request the E-TRAK information, they must put something in the ICS history indicating that they sent the request to the group's E-TRAK resource person, and include that person's name. No GM approval is requested and there is no need for the E-TRAK resource person to access the case to verify completion of the request.

  5. Use internal sources such as IDRS to locate a telephone contact number for the QI or contact the QI team for assistance. If telephone contact is not successful, in order to meet your initial contact time requirement, you may send an appointment letter for a telephone meeting, and enclose Publication 1,Your Rights as a Taxpayer.


    The RO may also enclose Letter 1058, Final Demand, with the appointment letter. However, the RO may not send L1058 by itself on initial contact.

  6. Take the appropriate action in the following situations:

    1. If the QI did not have any credits, send L1058 to the QI..

    2. If the QI claimed the credits correctly on Form 1042, line 66, and the RO has verified on E-TRAK that the credits are there, but the credit was not properly credited on IDRS, contact the QI Technical Advisor Team Manager.


      Information to contact the QI manager and a list of QI Technical Advisors is located at http://lmsb.irs.gov/hq/pftg/qi/TA/TA.asp.

    3. If the QI mistakenly did not claim the credits, so there are no credits on line 66 of Form 1042, secure from the QI copies of Forms 1042-S, Foreign Person's U.S. Source Income Subject to Withholding, a letter from the QI explaining the reason for requesting an adjustment, and a corrected Form 1042. You will need these documents to prepare an adjustment. See IRM, Adjustments on Qualified Intermediary Cases.

    4. Revenue Officers may not report a QI case Currently Not Collectible (CNC).

  7. Contact the QI team prior to taking any further case action if no response is received from the QI. The QI team will send a letter to the QI requiring them to contact the revenue officer.

  8. Verify that the QI did not contact the QI team before pursuing collection action.

  9. Continue with normal collection actions if the QI does not contact you within 60 days, such as filing the notice of federal tax lien, issuing levies, etc.


    Do not assess the trust fund recovery penalty against the Qualified Intermediaries since the QI agreement contains provisions that penalize the QI for non payment of withholding taxes.

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