8.10.3  Appeals Inventory Validation Process

Manual Transmittal

August 31, 2012

Purpose

(1) This revises IRM 8.10.3, Appeals Inventory Validation Process.

Material Changes

(1) Revised IRM to reflect new organizational titles resulting from the Appeals 2012 Alignment Project.

Effect on Other Documents

This supersedes IRM 8.10.3 dated June 4, 2009.

Audience

Appeals

Effective Date

(10-01-2012)


Susan L. Latham
Director, Policy, Quality and Case Support

8.10.3.1  (02-06-2009)
Introduction to this IRM Section

  1. All employees who establish cases on the Appeals Centralized Database System (ACDS), and who are assigned cases and tax returns for resolution of tax matters, are responsible for controlling Appeals inventory of case files and tax returns.

  2. This section establishes requirements for inventory validations to ensure all case files and tax returns in the possession of Appeals are controlled on ACDS and that data reflected in the database is accurately reflected.

8.10.3.2  (02-06-2009)
Appeals Inventory Validation Process (AIVP)

  1. Inventory validation is important because it ensures the following:

    • Proper control of case inventory in Appeals’ jurisdiction.

    • Verification of statute of limitations dates.

    • Accuracy of Appeals ACDS database.

  2. Validating inventory, statute dates, and database accuracy requires using physical validation and automated validation methods.

  3. Appeals Inventory Validation Process (AIVP) is commonly called the "ACDS Drawer-to-List Validation" .

  4. Appeals Managers are responsible for completing this process jointly with their employees who are assigned an inventory of cases.

    Note:

    The annual physical inventory validation does not relieve employees of statute verification upon receipt of the case as outlined in IRM 8.21.1.

  5. For efficiency, managers are encouraged to complete the validation in conjunction with a workload review when possible.

  6. Managers validate cases closed to them with no ACAP date input.

8.10.3.2.1  (02-06-2009)
Dates for AIVP

  1. Each Appeals office conducts a physical inventory validation of all assigned cases in Appeals jurisdiction at least once during the fiscal year.

  2. Generally the validation occurs during the first half of the fiscal year and includes all open cases within the jurisdiction of the Appeals organization. However, the dates of the AIVP may change each year as directed by Headquarters.

8.10.3.2.2  (02-06-2009)
Inventory Included

  1. Inventory included in the validation process is ALL open inventory assigned to employees who establish cases on the Appeals Centralized Database System (ACDS), and who are assigned cases and tax returns for resolution of tax matters.

8.10.3.2.3  (02-06-2009)
What is Identified During Validation

  1. A properly performed annual inventory validation identifies:

    1. Cases in possession of an Appeals Officer but not controlled on ACDS.

    2. Cases controlled on ACDS but not in the possession of an Appeals employee.

    3. Erroneous statute of limitation dates.

  2. Conduct the physical inventory validation in accordance with instructions issued by Headquarters.

8.10.3.3  (10-01-2012)
Validation of Appeals Centralized Database System (ACDS)

  1. At least once each fiscal year, each Appeals office also validates the accuracy of the ACDS database in accordance with instructions provided by Appeals Headquarters.

  2. Database accuracy validation ensures that ACDS is as accurate as possible at all times. It is very important to identify and correct errors as early in a case’s life as possible.

  3. Account and Processing Support (APS) and Field Operations share responsibility for data accuracy.

  4. Accuracy of the ACDS database is critical to Appeals for -

    • Determining staffing needs for specific work streams and all Appeals.

    • Identifying training needs for Appeals employees.

    • Creating Feedback Loop information for IRS Operating Divisions.

    • Filtering cases that may not be eligible for an appeal.

    • Other reasons vital to Appeals business operations.

8.10.3.3.1  (02-06-2009)
Proper ACDS Control

  1. Ensure all tax returns and/or return equivalents in the possession of the employee are properly controlled on ACDS.

  2. Physically inspect each case file and compare the tax return and/or return equivalent to a current ACDS Case Inventory Listing for the employee.

8.10.3.3.2  (02-06-2009)
ACDS Accuracy

  1. The validation process varies from year to year depending on the greatest areas of concern.

    1. Each year Headquarters decides if validation of database accuracy will consist of a 100% review of all Appeals inventory or if it will be limited to fewer cases, work streams, critical fields, etc.

    2. Headquarters uses statistical sampling, to the extent possible, to lessen the burden on field operations.

  2. When available, use technology to validate the database.

8.10.3.3.3  (02-06-2009)
If Errors are Found

  1. Manager notes errors in "Red" on the ACDS Case Inventory Listing and forwards the listing to APS for correction.

  2. APS updates ACDS accordingly, and returns the ACDS Case Listing to the requesting manager as confirmation the updates are complete.

  3. Once confirmation is received, the manager verifies the corrections were made. Manager certifies validation is complete to their manager through their Technical Advisor.

  4. See Exhibit 8.10.3-1. This exhibit provides a template to use as the Managerial Certification Memorandum.

8.10.3.4  (02-06-2009)
ACDS Case Inventory Listings for Appeals Technical Personnel

  1. Appeals Technical Personnel includes ALL employees who establish cases on the Appeals Centralized Database System (ACDS), and who are assigned cases and tax returns for resolution of tax matters.

8.10.3.4.1  (02-06-2009)
Generating Case Inventory Listing

  1. Generate a current ACDS Case Inventory Listing as follows:

    1. ACDS Case Inventory List is located under Reports - Case Inventory Reports - AO listing.

    2. Employee’s name defaults to their name automatically.

    3. Sort inventory by "KEYCASE" and "TPNAME " .

      Note:

      DO NOT check the box that reads - Include Closed Cases in Inventory.

    4. Select the button option that reads - Print Part 3 and related work unit numbers (WUNO) separately at bottom of the listing.

8.10.3.5  (02-06-2009)
ACDS Case Inventory Listings for Appeals Processing Services (APS)

  1. Generate a current ACDS Case Inventory Listing as follows:

    Step Action Required
    1 Select "APS Inventory Case Listing" located under - APS - Reports - IVL
    2 Select "Just Cases in Inventory"
    3 Sort by TPNAME

  2. Generate and work the following reports:

    • PEAS Inventory Listing

    • ACDS Unassigned Report – Select the 2nd option and then select Action

      Note:

      ACTION ="" OR ACTION ="SHIPPED"

    • SHIPPED Follow-up Report - Add one year to the follow-up date

    • Statutory Notice Report
      Answer Y to question whether to include NPS cases.
      Enter Beginning SN Issued Date: Subtract one year from default date (first date of current month less one year).
      Enter Ending SN Issued Date: Use default date (last date of current month).
      Answer Y to question whether to print the earliest Statute Date.

    • REJECT Follow-Up Report - Add one year to the follow-up date.

    • STIPFF Follow Up Report (Stipulated Decision Documents for Filing).

8.10.3.6  (02-06-2009)
Cases in the Possession of IRS Chief Counsel for Trial Preparation

  1. Identify as "Part 3" on the ACDS Case Inventory Listings. No other verification is required for these cases.

  2. Update the data field for the "Part" accordingly if cases in Counsel’s possession do not reflect "Part 3" on the ACDS Case Inventory Listing.

  3. Validate cases in the Appeals’ possession that are listed as "Part 3" on the ACDS Inventory Case listing and update the "Part" field to "Part 2" .

8.10.3.7  (02-06-2009)
Cases in Tax Computation Specialist Inventory

  1. ATM and the technical employee assigned the case on ACDS validate the TCS inventory. TCS working the tax computation request is not responsible for validating the case.

    Note:

    TCS does not need to generate an open inventory listing.

8.10.3.8  (02-06-2009)
Case on Technical Employee's Listing but Physically Located in APS

  1. When a case is on a technical employee’s ACDS Case Inventory Listing but physically located in APS, the ATM and technical employee research ACDS to determine whether the case is assigned on PEAS.

    Note:

    Managers – Annotate cases ACDS Case Inventory Listing with "no ACAP date and not on PEAS" and provide it to the PTM for analysis.

8.10.3.9  (02-06-2009)
Case or Tax Returns Not Located

  1. Record the Missing Case Report with cases or tax returns that are not located.

  2. Forward the report to the Technical Advisor as an attachment to the Managerial Certification Memorandum. Include plan of action of how case was resolved on the Missing Case Report.

  3. See Exhibit 8.10.3-2. This exhibit contains a template for the Missing Case Report.

8.10.3.10  (02-06-2009)
Definition of Collection Casework

  1. Collection casework is defined as follows:

    • Offer In Compromise (OIC) Cases

    • Collection Due Process (CDP) Cases

    • Equivalent Hearing (EH) Cases

    • Trust Fund Recovery Penalty (TFRP) Cases

8.10.3.10.1  (06-04-2009)
Validate Collection Statute

  1. Settlement Officers and Collection Specialists will ensure all Collection cases are properly controlled on ACDS, CDPTS and IDRS and will validate the accuracy of the Collection Statute Expiration Date (CSED) as follows:

    Type of Case Review Required
    OIC Timeliness to ensure request for an Appeal was timely made.
    CDP
    1. Review TXMODs (or other transcripts) that TC 520 cc 76 or 77 is posted with the correct date.

    2. Review the Case Summary Card (CSC) that SUSP is posted under CODE in the Summary Return Information section of the CSC. IRM 8.22.2.2.4.6

    EH
    1. Review TXMODs (or other transcripts) that a TC 520 cc 76 or 77 is not posted.

    2. Verify the CSC that the oldest CSED date is listed under STATDATE and "CSED" under CODE.

      Note:

      If the CSC has multiple periods, the oldest CSED and "CSED" is only listed once.

    IRM 8.22.2.2.21.1
    Assessed TFRP (Claim) Cases Verify:
    1. The CSED date for each tax period matches the CSED date on IDRS, and;

    2. The statute code is CSED.

    Unassessed TFRP (TBOR2) Cases Verify:
    1. Letter 1153 (DO) was issued by Collection prior to the expiration of the ASED,

    2. The appeal (protest) was timely,

    3. The POA (Form 2848) is valid,

    4. All periods listed on Form 2751 are listed on the case summary card,

    5. The statute code is TBOR2, and;

    6. The statute date is not listed on the case summary card.

    Unassessed TFRP (Form 2750 Waiver) Cases Appeals no longer accepts TFRP cases with untimely protests unless the trust fund recovery penalties are assessed. For those cases remaining in inventory, verify:
    1. All periods listed on the case summary card are listed on Form 2750, Waiver Extending Statutory Period for Assessment of Trust Fund Recovery Penalty,

    2. The taxpayer or authorized representative signed the waiver,

    3. The Compliance Area Director or his designee signed the waiver,

    4. The statute code is blank, and;

    5. The earliest statute date from Form 2750 is entered for each period.

  2. Per IRC 7122(f) and Notice 2006-68, an OIC shall be deemed accepted if it is not rejected, returned or withdrawn before the date which is 24 months after the date of the submission of the offer. Any period during which any tax liability that is the subject of the OIC is in dispute in any judicial proceeding shall not be taken into account in determining the expiration of the 24-month period. The date of submission of an offer for purposes of section 7122(f) is the date on which the offer is received by the Service.

    Note:

    Except for suspension of the 24-month during which any tax liability that is the subject of the OIC is in dispute in any judicial proceeding, there are no means to extend or suspend the 24-month TIPRA period. The 24-month period includes whatever time a case may be pending in Counsel awaiting their statutory opinion on an acceptance recommendation.

  3. There are three instances where Appeals receives an OIC without a decision (reject, return, withdrawal) first being made by a Compliance function and thus have an open TIPRA statute:

    • OIC submitted as an alternative to collection in a CDP or EH case

    • OIC based upon Doubt as to Liability (DATL) where Appeals originally determined the liability (e.g., income tax, Trust Fund Recovery Penalty, etc.)

    • combination offer based upon both Doubt as to Collectibility (DATC) and DATL submitted on the July 2004 revision of Form 656 and where Appeals originally determined the liability, in which case Collection should have determined the collectibility aspect of the offer must be rejected but no similar determination was made by Exam concerning the liability aspect of the offer (these should be rare because the Service has utilized a Form 656–L since January of 2006, and a Form 656 without DATL as an available option since February of 2007, but there are still some combination offers out there that were submitted after July 16, 2006)

      Note:

      See IRM 8.23.2.3.1 for criteria before returning any DATL offer as a premature referral.

  4. Use the following table to check for open TIPRA statutes:

    STEP QUESTION If YES If NO
    One Was a formal rejection letter issued by either Collection or Examination? The 24-month TIPRA period under IRC 7122(f) does not apply and no further action is needed. Any ACDS Statute Code 'TIPRA’ input onto the WUNO should be removed and replaced by Statute Code ‘SUSP’. Steps 2 – 5 do not apply. Proceed to Step Two
    Two Was ACDS Statute Code "TIPRA" input onto the WUNO? Proceed to Step Three Submit a request to APS to have Statute Code ‘TIPRA’ input and be sure to use the proper date stamped on the original Form 656 plus two years as the statute date. Proceed to Step Three.
    Three If ACDS Statute Code ‘TIPRA’ was input onto the WUNO, is the corresponding statute date the date stamped on the originally submitted Form 656 plus two years? The Statute Code and date are accurate - proceed to Step Four Submit a request to APS to have the statute date changed to the proper date and proceed to Step Four
    Four Was the offer submitted as part of a CDP or EH case? Proceed to Step Five The case must be a Doubt as to Liability offer in which Appeals determined the original liability. Make sure Steps Two and Three above are done and double check the WUNO to make sure the ‘TIPRA’ Statute Code with the proper statute date are present. Step Five does not apply.
    Five If the OIC is part of a CDP/EH case, was ACDS Feature Code ‘DP’ input onto both the CDP/EH and OIC WUNOs? All necessary actions are done and the OIC WUNO will show up on a Statue Expiration Report and/or an Ad Hoc report Submit a request to APS to have Feature Code ‘DP’ added to both the CDP/EH and OIC WUNOs

Exhibit 8.10.3-1 
Template for Managerial Certification Memorandum

Managerial Certification Memorandum
(memo)
DATE:  
TO: (Name and Title)
FROM: (Certifying Manager's Name)
SUBJECT: FYxx Interim Appeals Inventory Validation Process (AIVP) - Managerial Certification
  This memorandum serves as my certification that I have completed the FY 2009 Interim AIVP.
  I certify that each tax return for Examination work and each case file for Collection work has been located and is properly controlled on the Appeals Centralized Database System (ACDS). Those cases and/or tax returns that could not be found are listed on the "Missing Case Report" attached to this memorandum.
  ACDS has been updated to correct inaccuracies identified during the validation process for the following data fields:
  If you have any questions or require additional information, please contact [Certifying Manager’s Name] at [Certifying Manager’s Telephone Number], or you can contact [him or her] at [Certifying Manager’s Email Address].
Attachments:  

Exhibit 8.10.3-2 
Template for Missing Case Report

CasesMissing Case Report
AREA TEAM TAXPAYER NAME TAX PERIOD(S) ACDS STATUTE DATE EMPLOYEE ASSIGNED
           
           
           

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