8.20.6  Interim Actions

Manual Transmittal

January 10, 2014

Purpose

(1) This document transmits revised IRM 8.20.6, Account and Processing Support (APS), Interim Actions.

Material Changes

(1) Editorial changes made throughout.

(2) 8.20.6.23.4 CDP Cases Remanded by the U.S. Tax Court and Supplemental Notices of Determination (8.22.1.3.2) has been updated to provide guidance on updating ACDS when the new ACAPDATE has been entered by the ATM.

(3) 8.20.6.24.2 Offer In Compromise (OIC) Received After the related CDP or EH Case has been updated to remove the card-in guidance which is included in IRM 8.20.5 and to clarify interim actions APS will take when notified by the ATE that an OIC has been received and is related to an existing CDP/EH case.

Effect on Other Documents

This IRM supersedes IRM 8.20.6, Account and Processing Support (APS), Interim Actions dated September 11, 2013.

Audience

Appeals

Effective Date

(01-10-2014)

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

8.20.6.1  (09-11-2013)
Advance Payments Overview

  1. This section identifies how the Appeals Technical Employee (ATE) will use Form 5402 to alert APS to make an interim assessment based on the receipt of an advanced payment. The ATE will also use Form 5402 to identify that an "IRC 6603 deposit" has been received as well as distinguish it from a "cash bond" or "payment of tax" .

  2. In some cases, Electronic Federal Tax Payment System (EFTPS) may be used to make electronic payments for cash bonds, advance payments and other remittances. For more information, see IRM 3.17.277, Electronic Payments.

8.20.6.1.1  (09-11-2013)
Procedure for Assessing Advanced Remittances

  1. Advance payments made on processed returns are treated as credits and additional steps must be taken to have the tax assessed. Ordinarily, if a non-docketed case is closed promptly and the advance payment is equal to or less than the proposed deficiency and interest, the liability will be assessed when the Appeals Office closes the case. However, in all docketed cases and in non-docketed cases where closing will be delayed, or where the payment might exceed the tax due, the liability will be assessed promptly. In such cases, the ATE will prepare instructions on the Form 5402Appeals Transmittal and Case Memorandum directing the assessment of the liability for the advance payment.

8.20.6.1.2  (09-11-2013)
Deposits, Undesignated Remittances and Conversion of Cash Bonds under Revenue Procedure 2005-18

  1. Form 5402, Appeals Transmittal and Case Memorandum, is used to identify information pertaining to remittances on cases in Appeals. The following lists situations that the ATE will annotate on Form 5402:

    1. Remittances received while the case is in Appeals.

    2. Information pertaining to remittances identified by the taxpayer but not found on the transcript of account.

    3. Amount of advanced payment(s), tax and period to which the payment applies and whether it is a designated or undesignated payment.

    4. For IRC 6603 deposits, the disputable tax, the date of the statement explaining the disputable tax or the presence of a copy of the 30-Day letter received by the Service with the designation (date stamped).

      Note:

      Without this information, APS cannot identify the deposits that qualify for overpayment interest at the short-term federal rates under IRC 6603.

8.20.6.1.3  (09-11-2013)
Interest on IRC 6603 Deposits

  1. Section 8 of Rev. Proc. 2005-18 provides procedures for the accrual of underpayment interest when a remittance is made. Since interest continues to accrue on accrued interest, a taxpayer must remit enough to cover all accrued interest as of the date of remittance, as well as the entire amount of the underlying tax in order to stop the running of any additional interest.

  2. Underpayment interest is suspended on the date the remittance (whether it is a payment of tax or a deposit) is received by the Service regardless of when the liability is assessed or the remittance is effectively posted to the taxpayer’s account as a deposit. If the Service holds the remittance as a deposit and then returns it to the taxpayer at their written request, interest is not suspended for the period the remittance was held as a deposit if a deficiency is later assessed for that period and type of tax.

  3. IRC 6603 provides for interest at the Federal short-term rate determined under IRC 6621(b), compounded daily. Credit interest allowed on a IRC 6603 Deposit returned at a taxpayer’s request must be manually computed and input with transaction code (TC) 770.

  4. See IRM 20.2.4.8.2IRC 6603 Deposits for additional guidance.

8.20.6.2  (09-11-2013)
Address or Name Change - Form 2363

  1. When the ATE determines changes to the taxpayer name and/or address are required, they will make the change using the AIVP Validation Tracking System (VTS), Other Validation. The validation is available from the AO/SO Validation menu accessible from the CARATS screen or the Case Summary Card bottom menu. The change will be designated as a Normal Update (N) if the change is the result of new case information. If the change is to correct an error on ACDS the change will be designated as an Error Correction (E) on the validation screen.

  2. Updates should be entered in ACDS prior to forwarding the case to APS for final closing on PEAS.

  3. To ensure that IDRS reflects the correct name and address for the taxpayer, the ATE should submit a request to APS to update the taxpayer's information on IDRS.

  4. Immediately upon request by an Appeals Technical Employee, APS will prepare Form 2363, Master File Entity Change, and input the information on IDRS. Name and address changes may be input on the same Form 2363 or each change may be input separately.

8.20.6.3  (09-11-2013)
AIMS Status Update (AMSTU) and AIMS Data Field Correction (AMAXU)

  1. APS is required to update both AIMS and ACDS when appropriate to ensure database accuracy.

  2. APS will update the AIMS database when there is a change in the status of a case. To update the AIMS database, use command code AMSTUA (when status is in 81) or AMSTUB (when Appeals status is other than 81).

  3. APS will use command code AMAXUA when appropriate to correct the AIMS data elements identified below:

    • Item 16 — Appeals Code

    • Item 20 — Claim Rejection Date

    • Item 42 — ARDI Indicator (Payment Code)

    • Item 800 — Appeals Results

    • Item 801 — Counsel Results

    • Item 802 — Appeals Adjustment Amount

    • Item 803 — Appeals Grade

    • Item 804 — Appeals Time

    • Item 805 — Counsel Adjustment Amount

    • Item 806 — Counsel Grade

    • Item 807 — Counsel Time

    • Item 808 — Amount Disallowed — Exam Claim

    • Item 809 — Amount of Appeals/Counsel Claim

    • Item 810 — Amount Disallowed — Appeals/Counsel Claim

    • Item 811 — Closing Code

    • Item 820 — Workunit Number

    • Item 821 — Prior Appeals Code

  4. Command Code AMAXUA cannot be used to correct TIN, MFT, file source, tax period, or name control.

  5. Updates, changes and modifications to critical data fields on cases where AIMS = Y will require the Appeals Technical Employee to select the appropriate Processing Team Manager (PTM) in the Validation Tracking System to ensure that the request for AIMS update is sent to the PTM's PEAS mailbox. The PTM, upon receipt of the systemic notification, will assign the update to the appropriate APS Tax Examiner for update to AIMS and PCS as requested .

8.20.6.4  (09-11-2013)
ACDS Update and Correction Procedures

  1. Appeals employees must use the validation tracking system to update ACDS critical data fields. APS will reject all requests that are available for the ATE to update through the VTS.

  2. In the rare case where a change is required that is not part of the VTS critical data fields, the ATE will prepare and submit a paper request to APS, identifying the required update, change or modification.

  3. The campus and field offices will use the following procedures to request assistance from APS in correcting or updating ACDS:

    1. Prepare "ACDS Update Request Form" or "APS Request Form for Collection Cases" found on APGolf under ACDS Updates, completing only the required items.

    2. Find the correct e-mail address on OUTLOOK Global Address List - *AP-PQCS-APS-(your Area, East, West or Campus)-(your APS update office) ACDS Update Request.

      Example:

      *AP-PQCS-APS-East-ATL ACDS Update Request

    3. E-mail the "ACDS Update Request Form" via encrypted e-mail.

      Note:

      Do not send update requests to the PTM’s Outlook e-mail address.

  4. APS will:

    1. Process the "ACDS Update Request Form" within 3 business days of receipt.

    2. E-mail the requesting employee if clarification is needed to process the request.

    3. Return any request for update/correction that was not submitted via the electronic form/mailbox.

  5. The electronic mailbox allows APS management to monitor timeliness and accuracy of the ACDS Update Requests.

8.20.6.4.1  (09-11-2013)
ACDS Inactive Case Statuses (8.2.3.16)

  1. The following INACTIVE status codes are computer generated based on the entry of an action code on the case in ACDS:

    • E/DD - Inactive, waiting action/info by Compliance

    • E/STP - Inactive, to Counsel for stipulation filing

    • E/T - Inactive, to Counsel for trial prep

    • E/TSN - Inactive, waiting TP action on SN

8.20.6.4.2  (02-01-2007)
ACDS - Updating Case Status

  1. When the status of a case is changed on AIMS, it must also be updated on ACDS. Some items that may need to be updated are:

    • ACTION — code to describe action taken

    • TODATE — date action started

    • FROMDATE — date action ended

    • LACTION — code to describe action (locally defined)

    • LTODATE — date local action started

    • LFROMDATE — date local action ended

8.20.6.4.3  (09-11-2013)
ACDS Feature Codes for Post Appeals Mediation Cases (8.26.5.4.17)

  1. For purposes of accurately tracking the amount of direct time on Appeals cases, Appeals mediators will be assigned as a team member on the mediation case.

  2. The Appeals mediator will request that Account and Processing Support (APS):

    1. first, input the feature code "TL" to create the Team Leader record for the Appeals Team Case Leader (ATCL) or ATE even if there are no other team members on the case besides the Appeals mediator;

    2. then, input the feature code "TM" to create the Team Member record for the Appeals mediator; and

    3. input the feature code "MD" on the same case to indicate it is a mediation case. (This feature code will only be used on cases for which the taxpayer requests mediation while the case is in Appeals jurisdiction.)

  3. The ATCL or ATE is responsible for verifying that APS follows the procedures in IRM 8.7.11, Working Appeals Team Cases, in establishing the team member assignment.

8.20.6.5  (09-11-2013)
Re-assignment of Cases Within the Same Area (ACDS Closing Code 40)

  1. Cases are re-assigned to another Appeals Technical Employee after approval by the Appeals Team Manager. The ATE will print out a re-assignment sheet and the Appeals Team Manager will indicate who the new Appeals Technical Employee is.

  2. Cases are only re-assigned if both Appeals Technical Employees are in the same area.

  3. Make the following ACDS updates to re-assign a case:

    1. Select "Special Activities Menu"

    2. Select "Closing Code 40 Update – Reassign to another AO" and search for the case.

    3. Select the new Appeals Technical Employee. The list is alphabetical by last name.

    4. Update the CORWUGRADE to correct the grade of the case, if necessary.

    5. Select "Submit Update"

    6. If you are mailing the case to another POD, return to the "Main Cases Menu" and select "Action Fields Update" and update ACTION = SHIPPED with a TODATE = date mailed and LACTION = 3 POD initials of the sending office – 3 POD initials of the receiving office with a TODATE = date mailed.

      Example:

      "RCH-BAL" means Richmond sent the case to Baltimore for reassignment to another ATE within the same area.

  4. You may also need to update AIMS. If the case is re-assigned to an Appeals Technical Employee in another office with another Appeals Office Code within the area and the case is on AIMS, transfer the AIMS database using command code AMSOCA.

  5. When the case is received from an Appeals Office within the Field area, update ACDS with a FROMDATE in ACTION SHIPPED and on LACTION POD-POD.

  6. Cases re-assigned to an Appeals Technical Employee outside your area, will be closed as a transfer. See IRM 8.20.6.6 Transfer of Cases Within Appeals.

8.20.6.6  (09-11-2013)
Transfers of Cases Between Areas Within Appeals (ACDS Closing Code 40) (8.4.2.5)

  1. The sending Appeals Office will transmit the administrative file, the original and one copy of the Form 3210Document Transmittal, the ACDS transfer form if used, and an AIMS print for each return to verify the AIMS transfer, if on AIMS (AMDISA and/or AMSOCA).

    Note:

    Do not transfer an AIMS record in status 81. Update AIMS to status 80 or 82 before transmitting the administrative file.

  2. Make the following ACDS updates to transfer a case:

    1. Select "Special Activities Menu"

    2. Select "Closing Code 30 Update – Transfer to another Office" and search for the case.

    3. Select the TRANSFER AREA (The Area you are transferring the case TO)

    4. Select a TRANSFER AOC from the list of valid TRANSFER AOCs for the TRANSFER AREA

    5. If there is more than one POD for the TRANSFER AOC, select the correct TRANSFER POD.

    6. Select DATECLSD/TODATE = date mailed

    7. Select "R" for a Regular Transfer or "W" for a Workload Transfer

    8. Select "Submit Update"

    9. If you are mailing the case to another POD, return to the "Main Cases Menu" and update LACTION = 3 POD initials of the sending office – 3 POD initials of the receiving office with a TODATE = date mailed.

      Example:

      "RCH-BAL" means Richmond sent the case to Baltimore for transfer to another ATE within the same area.

      Note:

      Do Not Update ACTION, ACDS systemically updates this field with ACTION = "TR NNXXPODC" (NN=Area, XX=AOC, POD=POD Initials, C=R or W)

  3. When a return is on AIMS and is transferred to another AOC, the sending office will transfer the AIMS database using command code AMSOCA.

  4. Use Form 3210 Generator on ACDS which will auto-populate the mailing address based upon your selection. Follow normal Form 3210 procedures for follow-up and receipt verification. Any necessary approvals of the Appeals Area Directors or the Chief, Appeals will be obtained and documented in the file before transferring a case.

  5. When the case is received, the receiving office will accept the case from the INBOX by selecting "(Y)es ACCEPT this transfer case" , which will systemically enter a FROMDATE in the ACTION "TR NNXXPODC" field. Manually enter the FROMDATE in the LACTION "POD-POD" field.

  6. The receiving office will acknowledge receipt by signing and dating the appropriate boxes and returning a copy of the signed Form 3210 to the transferring Appeals Office. If some reason exists for not accepting a transfer, the receiving office will return the case with an explanation. Contact by telephone or e-mail is suggested before returning the case.

    Note:

    See table below for additional guidance on Transfer of Docketed Cases

    Docketed Case Transfers
    IRM 8.4.2.5 Transfer of Case to Field Appeals Office
    IRM 8.4.2.5.1 Reconsideration by Field Appeals
    IRM 8.4.2.5.2 Workload Transfers

8.20.6.7  (09-11-2013)
Certified and Registered Mail Procedures

  1. Maintain a record of delivery of certified or registered mail. This record may be Post Office Department Form 3877, Firm Mailing Book, or the form used by private mail services. Computer generated listings are acceptable; however, they must contain the same information and follow a similar format.

  2. Depending on local practices, APS usually mails notices of deficiency and maintains the mailing files. However, in some offices, a centralized or consolidated mail room may perform these functions. Mailing records and files must be retained until 5 years after the issuance date

  3. Use certified mail for addresses within the United States for:

    • Abatement of interest determination letters

    • Notices of deficiency (90-day letters)

    • CDP determination letters

    • Innocent spouse determination letters

    • Employment tax determination letters

    • EP and EO final adverse determination letters

    • Notice of claim disallowance under IRC 6532

    • Transmitting Form 2198 on Deficiency Dividend cases

  4. Use registered mail for letters to taxpayers with mailing addresses outside the United States. A "Return Receipt" must be requested when sending by registered mail.

8.20.6.7.1  (02-01-2007)
APO and FPO addresses

  1. Military personnel have APO or FPO addresses.

    1. APO = Army or Air Force Post Office

    2. FPO = U.S. Navy Fleet Post Office

  2. Send letters with an APO address for Alaska (zip code 99502) or Hawaii (zip code 96860) by certified mail.

  3. Use registered mail for all other APO addresses, because they are considered to be outside the U.S.

  4. FPO addresses are always considered outside the U.S. Use registered mail for all FPO addresses.

8.20.6.8  (09-11-2013)
Abatement of Interest Notice of Disallowance Issued on Abatement of Interest (8.7.7.14.6)

  1. The following guidelines are provided for abatement of interest claims filed after July 30,1996.

  2. The ATE prepares a disallowance letter for unagreed cases. The taxpayer has 180 days to petition the United States Tax Court for review of the disallowance.

  3. Upon receipt of the administrative file with the signed notice of disallowance (Letter 2391 or Letter 2392 ), mail and retain copies as outlined for notices of deficiency. See procedures below:

    1. Verify the address using ENMOD or INOLES.

    2. If the taxpayer lives within the U. S., send the final determination letter by certified mail. If the taxpayer lives outside the U.S., send the letter by registered mail.

    3. Complete PS Form 3800Certified Mail Receipt. Document the certified mail number on the original and all additional copies.

    4. Send the appropriate copies of the letter and schedules to the representative, if applicable.

    5. Keep a dated copy of the letter and schedules in the administrative file.

    6. Suspend the administrative file until the taxpayer petitions, or the taxpayer defaults.

      Note:

      The taxpayer has 180 days to petition the Tax Court.

    7. In the mailing record - enter the taxpayer's name and mailing address as it appears on the envelope, and enter the mailing date.

  4. Update ACDS:

    • SNTYPE = 180A

    • SNDATE = date letter is mailed. The letter MUST be mailed on the date shown on the letter.

    • On the return level screen, SND = Y

  5. APS must retain the administrative file on the disallowed claims for "180 days plus 2 months" to allow time for receipt of taxpayer’s petition to the U.S. Tax Court.

  6. If the letter issued to the taxpayer was for "partial disallowance" , APS processes the abatement on the allowed portion of the claim as an interim adjustment in accordance with the ATE instruction and takes no account adjustment action on the disallowed portion of the claim during the suspense period.

    Note:

    If the interest abatement claim was resolved with finality by obtaining Form 906 , Closing Agreement on Final Determination Covering Specific Matters, a final determination letter is not needed. See IRM 8.20.7 for procedures on closing an agreed interest abatement case.

8.20.6.9  (09-11-2013)
Appeals Issued Statutory Notice of Deficiency (SND) - Introduction (8.2.2.1 and 8.2.2.2)

  1. When a statutory notice of deficiency is issued, the case is considered a 90-day case from the date the notice is issued until a petition is filed with the United States Tax Court or until expiration of the 90-day period. This section covers how to process 90-day cases that are both resolved and not resolved during the 90-day period.

  2. A statutory notice of deficiency is generally referred to as a 90-day letter.

  3. If there is a deficiency in the case as defined in IRC 6211, IRC 6212 authorizes mailing a statutory notice of deficiency to the taxpayer's last known address using certified or registered mail.

  4. When Appeals issues the statutory notice of deficiency, the case can be considered or reconsidered during the 90-day period.

  5. Reconsideration of a case does not extend the 90-day time in which the taxpayer may petition the Tax Court for a redetermination.

8.20.6.9.1  (09-11-2013)
Special Procedures When Issuing a Statutory Notice of Deficiency on a Refund Suit (8.2.2.2)

  1. Special procedures apply when issuing a statutory notice of deficiency on a Refund Suit. See IRM 8.7.1, Refund Suits—Statutory Notice of Deficiency Issued, for detailed information.

8.20.6.9.2  (09-11-2013)
Statutory Notice of Deficiency Issued by Appeals - Cases to Counsel for Concurrence

  1. Some notices of deficiency, as well as Employee Plans (EP) and Exempt Organizations (EO) final adverse determination letters, will go to Counsel for concurrence before the letter is issued. The ATE will indicate when this situation occurs. The administrative file sent to Counsel will contain the following:

    • Approved Form 5402 marked for Counsel concurrence and either a completed but unsigned statutory notice or a draft of paragraphs to be included in the statutory notice.

    • All returns and documents which were in the case file when it was received in the Appeals Office.

    • Copies of all correspondence received or sent while the case was in Appeals.

  2. Enter action code SNDC and the current date (date case sent to Counsel) on the update case screen.

  3. On a monthly basis, the APS Reports Team will run the SNDC follow-up list to determine whether Counsel has returned the administrative file.

8.20.6.9.3  (09-11-2013)
Statutory Notice of Deficiency Issued by Appeals - Cases Returned by Counsel - Concurrence Approved

  1. When the administrative file is returned through APS with Counsel’s approval:

    1. The APS TE will review the file to confirm all returns and other documents were returned.

    2. If the file was sent to Counsel with a completed but unsigned notice of deficiency, return the file to the Appeals Technical Employee .

    3. If the file was transmitted to Counsel with a draft of the paragraphs to be included in the statutory notice, send the file to the Appeals Technical Employee for preparation of the statutory notice and signature.

    4. Update ACDS by entering the date the administrative file was returned by Counsel in the FROMDATE on the case update screen.

8.20.6.9.4  (09-11-2013)
Statutory Notice of Deficiency Issued by Appeals - Cases Returned by Counsel - Without Concurrence

  1. When the administrative file is returned through APS with Counsel’s approval:

    1. Confirm that all returns, documents, and other papers forwarded to Counsel were returned except those intended for Counsel’s retention.

    2. Update ACDS by entering the date the administrative file was returned by Counsel in the FROMDATE on the update case screen.

    3. Send the file to the Appeals Technical Employee for further consideration.

8.20.6.9.5  (09-11-2013)
Statutory Notices of Deficiency (SND) Issuance (8.17.4.29)

  1. APS usually mails notices of deficiency and maintains the certified mailing files. However, in some offices, a centralized or consolidated mail room may perform these functions. Certified mail records and files must be retained until 5 years after the issuance date.

  2. APS is responsible for issuing Statutory Notices of Deficiency (SND) as requested by the ATE. The administrative file submitted by the ATE must include an approved Form 5402, a signed notice of deficiency letter and a correctly prepared "right-sized" envelope with the ATE correct return address.

    Note:

    If the ATE does not provide a correctly prepared "right-sized" envelope, do not reject the case for this reason alone. Instead, APS will correctly prepare the envelope(s). If the envelope's return address is different from the ATE's return address, use a label to overlay the envelope's return address with the ATE's correct return address. This will ensure that if the SND is undeliverable, it will be returned to the ATE's local office and received by the ATE.

    Caution:

    Carefully review the taxpayer's address on the envelope as the envelope is used to determines whether the SND was mailed to the "Last Known Address" .

  3. If the notice of deficiency is for a separate individual return, a window envelope may be used. However, use the right sized envelope to avoid disclosing any information other than the name and address.

  4. If the notice of deficiency is for a joint return, each spouse must receive a notice in an envelope addressed only to them.

    1. Verify the address included on the notice prepared by the ATE and approved by the ATM matches the SPARQ, INOLES or ENMOD print included in the administrative file submitted by the ATE.

    2. Compare the name and address of the taxpayer(s) shown on the notice of deficiency with the name and address shown on the envelope(s) to ensure they are the same.

    3. If there is a discrepancy, contact the ATE to resolve prior to issuing the SND.

  5. Make sure there are a sufficient number of copies of the notice of deficiency and identify them for distribution to the persons designated to receive them.

  6. Verify that the letter, the audit statement, and any agreement form all have the same:

    • Taxpayer(s) name

    • TIN

    • Tax period(s)

    • Deficiency

    • Penalty

  7. Date the notice of deficiency and all copies. The notice of deficiency MUST be mailed on this date.

  8. ACDS will calculate the "Last Day to Petition Tax Court" and populate the SNEXPDATE field after you enter the SNTYPE and SNDATE fields and click Submit:

    Note:

    ACDS is programmed to account for Saturdays, Sundays and Legal Holidays in the District of Columbia

    Caution:

    Always use the correct SNTYPE and SNDATE to ensure that the SNEXPDATE is calculated correctly.

    1. If the taxpayer's address is within the United States add 90 days to the date the notice of deficiency is issued.

    2. If the taxpayer's address is outside the United States or the Service has knowledge that the taxpayer is out of the country when the notice of deficiency is issued, add 150 days to the date the notice of deficiency is issued.

    3. Complete PS Form 3800, Certified Mail Receipt. Notate the certified mail number on the original letter and all additional copies.

    4. The "TARGET DATE" calculator in the ACDS Utilities Menu is available for use to calculate the "Default Date" once the SNEXPDATE is generated by ACDS. See Exhibit 8.20.6-1 Calculating the Default Date for additional information.

  9. Generally, the taxpayer gets the original letter (certified/registered mail) and the representative gets a copy (regular mail). Follow the mailing instructions on the Form 2848, Power of Attorney and Declaration of Representative, or Form 8821, Tax Information Authorization, if applicable. This may include:

    1. Sending all original documents to the representative (use certified/registered mail) and a copy to the taxpayer (use regular mail). The letter should be addressed to the taxpayer in care of the representative.

    2. Sending a copy of the documents to a second representative.

    3. NOT sending a copy to the representative.

    Note:

    In the case of duplicate original notices, these same instructions apply to each taxpayer and/or their respective representatives.

  10. The original notice must be mailed by certified or registered mail.

    1. Use Certified Mail when address is within the U.S.

    2. Use Registered Mail when address is outside the U.S.

  11. Insert the following in the envelope containing the original notice of deficiency:

    1. Original dated and signed notice of deficiency letter and accompanying statements and schedules as provide by the ATE within the SND package.

    2. A return envelope for returning the agreement.

  12. Enter the taxpayer’s name, mailing address as it appears on the envelope (in care of representative, if appropriate), and mailing date in the mailing record.

  13. Distribute the remaining copies of the notice of deficiency package as follows:

    1. Fasten one copy to the administrative file.

    2. Forward one copy to Counsel if their prior concurrence was necessary.

    3. Distribute the remaining copies according to local guidelines.

    4. Place the administrative file in the "Letter Issued–Awaiting Taxpayer’s Action" file.

8.20.6.9.6  (09-11-2013)
Updates to ACDS When APS Issues the Notice of Deficiency (8.17.4.31)

  1. Once a notice of deficiency is issued, update ACDS.

  2. An entry is required in SNTYPE on all cases where a notice of deficiency or a determination letter has been issued, including docketed cases received in from Compliance or the Campus. Select from the following:

    • 090A — Appeals issued notice of deficiency

    • 150A — Appeals issued notice of deficiency to taxpayer residing outside the United States

    • 180A — Appeals issued notice of final determination of partial or full disallowance of an abatement of interest claim

    • 090D — Compliance issued notice of deficiency.

    • 150D — Compliance issued notice of deficiency to taxpayer residing outside the United States

    • 090S — Campus issued notice of deficiency

    • 150S — Campus issued notice of deficiency to taxpayer residing outside the United States

    • FPAA —TEFRA (Appeals Issued FPAA)

    • FPAD — TEFRA (Compliance Issued FPAA)

    • FPAS — TEFRA (Campus Issued FPAA)

    • FSAA — TEFRA (Appeals Issued FSAA)

    • FSAD — TEFRA (Compliance Issued FSAA)

    • FSAS — TEFRA (Campus Issued FSAA)

    Note:

    In the event the notice of deficiency is rescinded under Rev. Proc. 98-54, follow the instructions set forth in IRM 8.20.6.9.15.

  3. Make an entry in SNDATE = Date Letter mailed.

  4. The expiration date is computer generated.

  5. On the update returns screen enter SND = Y, for each tax period covered by the notice of deficiency.

8.20.6.9.7  (09-11-2013)
Undeliverable or Unclaimed "Appeals Issued" Statutory Notice of Deficiency (8.2.2.3.1)

  1. Occasionally, the mail service is unable to deliver a statutory notice of deficiency, either because the taxpayer cannot be located or because the taxpayer will not accept delivery. In these circumstances, the Post Office returns the statutory notice of deficiency to the Appeals office according to the Return Address on the envelope.

  2. When the undeliverable/unclaimed (UND/UNC) SND is received in Appeals, it must be returned to the ATE for their action and decision.

    IF ATE Decides: THEN APS Will:
    The SND will not be reissued Upon receipt of the SND and ATE's written decision, place documents inside of the suspensed administrative file.
    A courtesy copy will be sent to a different address without impact to the existing SND Upon receipt of the SND and ATE's written decision, place the previously returned SND into the new "right sized" envelope provided by the ATE and mail to the address identified by the ATE.
    The SND must be reissued and sufficient times remains on the statute, the ATE will generate a new SND with the new Last Known Address, secure ATM approval, and submit the package to APS. Upon receipt of the new SND package, APS will:
    • pull the administrative file from suspense

    • reissue the new SND via certified mail

    • update ACDS SNTYPE and SNDATE

    • suspense the administrative file under the new default date

    They need the administrative file for their action and decision Upon notification by the ATE, APS will:
    • insert a charge-out notated with the date of removal and who the file is being sent to as a placeholder for the admin file

    • update ACDS Note field to identify the date the administrative file was returned to the ATE

    • use Form 3210 to transmit the file if ATE is not co-located

    • charged-out SND files will be identified as the Statutory Notice Issued Report is worked and follow-up actions taken as appropriate

8.20.6.9.8  (09-11-2013)
Reconsideration of "Appeals issued" Statutory Notice of Deficiency During Suspense Period (8.2.2.5)

  1. If the Appeals Team Manager (ATM) or Appeals Area Director decides to grant further consideration of a case in the suspense period, reactivate the case. When notified the case is being reconsidered:

    1. Remove the administrative file from suspense and give it to the Appeals Officer.

    2. Place a "chargeout" in the file where the administrative file is removed. Show the name of the case, the Appeals Officer, and the date this action is taken.

    3. Indicate in the Notes section of ACDS that the case has been returned to the Appeals Officer for reconsideration.

  2. If no agreement is reached after consideration or reconsideration in the suspense period:

    1. Ensure there is an approved informal memorandum and a signed closing letter for the unagreed case.

    2. Date the memorandum;

    3. Date and mail the closing letter.

    4. File the original memorandum and copy of the closing letter in the administrative file.

    5. Re-file the administrative file behind "Letter Issued—Awaiting Taxpayer’s Action File" and remove the charge out slip.

8.20.6.9.9  (09-11-2013)
Tax Court Petition Filed During the "Appeals Issued" Statutory Notice of Deficiency Suspense Period (8.2.2.8)

  1. If the taxpayer files a petition with the Tax Court , remove the administrative file from "Letter Issued—Awaiting Taxpayers’ Action File" to forward the file to Counsel.

  2. If the tax periods are on AIMS, update AIMS to reflect status 82. The docketed alpha code "QQ" is automatically generated on AIMS using the MMQQYYYY format (positions 15–20) when the status is changed to 82.

  3. Update ACDS case/returns screen as follows:

    1. DKTNO = docket number

    2. CLOSINGCD = 43

    3. DATECLSD = date case sent to Counsel

    4. ACTION = DCJUR

    5. TODATE = date case sent to Counsel

    6. Notice of Deficiency STATDATE= do not delete entry

    7. Determination Letter STATDATE= do not delete entry

    8. STATCODE = DOCKT for each tax period identified on the petition.

    9. Close DIMS

  4. Since Appeals already attempted settlement and issued a notice of deficiency when an agreement could not be reached, the administrative file is retained by Counsel for settlement attempts or preparation for trial.

  5. If Counsel answers the petition and returns the administrative file to Appeals for a second attempt at settlement, input Closing Code 42 on ACDS to put the case/record back in Part 2 of the assigned employees' inventory.

8.20.6.9.10  (09-11-2013)
Disposition of "Appeals Issued" Statutory Notice of Deficiency Cases (8.2.2.9)

  1. After a notice is issued on a case, disposition usually occurs in one of the following ways:

    IF THEN
    taxpayer agrees to the deficiency within the 90-day (150-day) period by signing the appropriate agreement form the case is forwarded for assessment action under Form 5402Appeals Transmittal and Case Memorandum.
    taxpayer fails to file the petition with the United States Tax Court within the prescribed period. the case is forwarded for default assessment action under Form 5402Appeals Transmittal and Case Memorandum.
    taxpayer enters into agreement under IRC 6212(d) to rescind the Notice of Deficiency follow procedures in IRM 8.20.6.9.15
    taxpayer files a timely petition and the case becomes docketed in the Tax Court the entire administrative file is transmitted to Counsel for preparation of pleadings and trial preparation.

8.20.6.9.11  (09-11-2013)
Non-Petitioned Year(s) in "Appeals Issued" Multiple Year Statutory Notice of Deficiency (8.2.2.12)

  1. If the taxpayer fails to petition one or more years of a multi-year statutory notice within the 90-day (150-day) period, APS must take the following actions:

    1. Update the statute date on AIMS.

    2. If Compliance issued the statutory notice of deficiency, notify Compliance via e-mail that a default assessment of the statutory notice of deficiency needs to be made for the Non-Petitioned tax Period(s) and the assessment verification provided to Appeals.

      Note:

      If the ASED is within 60 days, APS will process the assessment via quick Assessment procedures to protect the government's interest and avoid a barred statute.

    3. If Appeals issued the statutory notice of deficiency , prepare Form 5403 for each omitted tax period. Include a brief statement in Item A of Form 5403, explaining that the year(s) being adjusted was omitted from the petition. Process the Form 5403(s), to ensure that the default assessment is posted to the taxpayer's account timely.

      Note:

      If the ASED is within 60 days, APS will process the assessment via quick Assessment procedures to protect the government's interest and avoid a barred statute.

    4. Once assessment verification is received, delete the statute date on ACDS to remove the tax period(s) from the ACDS Statute Follow-up Report, and update the statute code to "ASESD for the non-petitioned years that have been assessed" . Indicate in the Notes section of ACDS that the non-petitioned year(s) has been assessed and is included with the docketed year(s) admin file.

8.20.6.9.12  (09-11-2013)
Non-Petitioning Spouse on a SND Issued by Appeals or Compliance (8.2.2.13)

  1. When a non-petitioning spouse assessment is required update ACDS as follows:

    Note:

    These instructions only apply to statutory notices of deficiency. A non-petitioning spouse workunit is not created for CDP determination cases if only one spouse petitions. Since the tax is already assessed, this action is not necessary for CDP cases.

  2. On an Appeals issued SND, update ACDS to create a workunit that includes three cases—the joint return, the petitioning spouse, and the non-petitioning spouse. The joint return is the key case.

  3. Make changes to the previously established joint return control as follows:

    • FEATRCD - Enter NS.

    • DKTNO - Leave Blank.

  4. Make the following changes on the update returns screen of the joint return(s) previously established:

    1. AIMS indicator - Enter Y if case is on AIMS. If the joint return is not on AIMS, enter N. (The joint return is controlled on AIMS. If it is not on AIMS when received, Appeals must establish the return on AIMS.)

    2. STATDATE - Enter the actual statute date on the joint return which results from the status of the non-petitioning spouse. Once verification of the MFT 31 assessment against the non-petitioning spouse is received, update the statute date to ten (10) years from the 23C date of the MFT 31 assessment. Also, update statute code to "CSED." Indicate in the Notes field of ACDS that the CSED is the result of the non-petitioning spouse assessment.

  5. Take the following steps to properly protect the ASED and timely provide the original administrative file to Counsel for ANSWER of the petition.

    • Create a "Dummy File" for the Non-Petitioning Spouse (NPS)

    • Place the NPS "Dummy File" in the SND Suspense Drawer until a separate petition is received, a signed waiver (agreement) is received or the NPS SND default date.

    • If an agreement is received from the NPS, timely process the SND adjustment via MFT 31 procedures, see IRM 8.20.6.9.13, update the NPS ACDS record to reflect the correct ASED and Statute Code, and forward the NPS "Dummy File" which includes verification of the MFT 31 assessment, for association with the original administrative file.

    • If the NPS SND defaults, timely process the defaulted SND via MFT 31 procedures, see IRM 8.20.6.9.13, update the NPS ACDS record to reflect the correct ASED and Statute Code, and forward the NPS "Dummy File" which includes verification of the MFT 31 assessment, for association with the original administrative file.

      Note:

      When a NPS MFT 31 account is established and assessed, you must also prepare an adjustment source document package to be sent to files for association with the transaction record. The package must include a copy of the adjustment input document, a photocopy of the face of the return, and a copy of the authority for the adjustment, i.e. copy of the signed agreement, or copy of the defaulted SND,

    • Once the Petitioning Spouses (PS) case is decided, additional processing action will be required during final closing, to correct the NPS MFT 31 account, or create an MFT 31 account for the PS, and link the MFT 31 Accounts for cross-referencing of payments.

  6. If Compliance issued the statutory notice of deficiency, notify Compliance via e-mail that a default assessment of the statutory notice of deficiency needs to be made for the Non-Petitioning Spouse in accordance with IRM 4.8.9.25.8 and the assessment verification provided to Appeals.

    Note:

    If the ASED is within 60 days, APS will process the assessment via Quick Assessment procedures to protect the government's interest and avoid a barred statute.

  7. Establish separate ACDS records for the non-petitioning and petitioning spouse

8.20.6.9.13  (09-11-2013)
Statutory Notice Issued by Appeals - Assessing the Non-Petitioning Spouse

  1. Occasionally a notice of deficiency (90-day letter) is issued against a proposed joint deficiency and only one spouse petitions the United States Tax Court. The other spouse agrees or does not take any action. These cases are considered "non-petitioning spouse" cases.

  2. If only one spouse petitions (confirm with Counsel), take action to timely assess the deficiency against the non-petitioning spouse (NPS).

  3. APS will prepare Form 3177 using TC 971, Action Code 103, XREF TIN = NPS TIN and use Command Code REQ77/FRM77 to input data to the MFT 30 account. This action will create an MFT 31 account for the non-petitioning spouse only.

  4. Prepare Form 5403 , as described below and input the MFT 31 Account Adjustment when the MFT 31 Account is available.:

    1. Check box "AMCLSS" at the top of Form 5403.

    2. TIN = TIN of primary taxpayer on the joint account

    3. MFT = 30

    4. Item 12 - Enter total tax and penalty to be assessed against the non-petitioning spouse.

      Note:

      On the MFT 31 account, the TC 300 will generate a TC 470, which will withhold collection.

    5. Item 14 is a required entry for AMCLSS.

    6. Item 56 - Check PA if the primary SSN is the non-petitioning spouse.

    7. Item 56 - Check SA if the secondary TIN is the non-petitioning spouse (This will cause the assessment to post to the MFT 31 account).

      Note:

      If Item 56 is checked for SA, you must also enter an Item 57 with the Spouse's 4 Alpha Character Name Control when inputting Command Code AMCLSS entries or AMCLS will return a reject message "ITEM 57 REQUIRED WHEN ITEM 56 EQUALS SA OR SE" . (Item 57 is not included in the most current revision of Form 5403.

    8. Items 16, 20, 802–811, 39, and 42 - Make no entries.

    9. Make a copy of the face of the return and associate it with the Form 5403 to be sent to campus files as the source document for the adjustment transaction.

      Note:

      If the case is being transferred because a change in place of trial has been granted, the transferring office is responsible for processing the interim assessment against the non-petitioning spouse. Associate a copy of the assessment verification documentation with the administrative file prior to transfer.

  5. For deceased taxpayers and those with a temporary SSN, make the non-petitioning spouse assessment on non-master file using MFT 20. The MFT should also be updated to 20 on ACDS. See IRM 3.17.45.5.7.2Non-Petitioning and Petitioning Spouse Accounts for guidance when a NMF account adjustment is required.

8.20.6.9.14  (09-11-2013)
Defaulted "Appeals Issued" Statutory Notices (8.2.2.15)

  1. When the case is processed for assessment (defaulted statutory notice) systematically check CATS and DIMS to determine if a petition was filed. Compare this information with the Statutory Notice of Deficiency Report generated from ACDS (or search for the name directly on ACDS).

  2. Check the SN listing for any case where Appeals issued the statutory notice of deficiency. Also check for any case on which Appeals accepted jurisdiction from Compliance during the 90-day period.

  3. If these cases do not appear on the Docket List during the suspense period, default the case.

  4. When the 120 or 180-day period expires in these cases, assess the deficiency by default if the taxpayer has not filed a petition with the United States Tax Court. A defaulted case is a case where a party fails to timely file a valid petition as required under IRC §6213(a) .

  5. After a reasonable amount of time, usually 120 days from the issuance of the notice, a case that does not appear on the Docket List is considered defaulted.

  6. Update ACDS using general closing instructions. In addition input the following:

    1. CLOSINGCD - 05

    2. ACTION - ACKCLS

    3. STATDATE - newly computed statute date.

      Note:

      See IRM Exhibit 8.20.7-1Form 5403, Appeals Closing Record (Instructions) ITEM 14-STATUTE EXTENDED TO DATE (MMDDYYYY FORMAT) and IRM 8.21.2Account and Processing Support (APS) Statute Responsibility for additional guidance.

    4. RevsdTax/Pen/Claim - enter the amounts from the notice of deficiency

    5. SN defaulted - Y = a 90 day letter was issued. Entry to reflect date assessed is required.

  7. Prepare Form 5403 for assessment.

8.20.6.9.14.1  (09-11-2013)
Disposition of Agreed or Defaulted "Appeals issued" 90-Day Cases Involving Claims (8.2.2.15.1)

  1. When an Appeals case includes both a Claim year and a Deficiency year on which a Statutory Notice will be issued, the ATE will prepare the appropriate Claim Disallowance Letter (unless the taxpayer has signed Form 2297, Waiver of Statutory Notification of Claim Disallowance prior to submitting the case to APS for issuance of the SND.

  2. APS will NOT date or issue the Claim Disallowance Letter, but will include it inside the front of the suspensed SND case.

  3. If, in response to the statutory notice of deficiency, the taxpayer submits an agreement or fails to file a petition within the time provided, the notice of claim disallowance must be issued when the case is processed for assessment of the SND.

8.20.6.9.15  (09-11-2013)
Rescinded "Appeals Issued" Notice of Deficiency Under Rev. Proc. 98-54 (8.2.2.14)

  1. In the event Appeals rescinds an Appeals issued 90-Day Statutory Notice per Form 8626, Agreement to Rescind Notice of Deficiency, update ACDS as follows:

    1. Remove 090A or 150A from SNTYPE field.

    2. Remove date from SNDATE field.

    3. In NOTE field enter "SND rescinded (date signed by Commissioner)."

    4. Change Y to N in SND field.

  2. If Form 872 or Form 872-A was also completed in conjunction with Form 8626 , Agreement to Rescind Notice of Deficiency update the STATDATE or statute CODE as appropriate on ACDS.

8.20.6.10  (09-11-2013)
Statutory Notice of Deficiency (SND) Issued by Compliance - Premature Default/Assessment (8.4.1.7.2)

  1. Various Compliance functions issue and suspense SNDs. These functions monitor the Docket Information Management System (DIMS) prior to taking default action, to ensure all "suspensed" SND cases, when Petitioned, are timely forwarded to Appeals and the AIMS Status updated via CC: AMCLS.

  2. On occasion, source functions default and/or prematurely assess a petitioned case. In this instance additional steps must be taken by both the originating Compliance function and Appeals, to secure a "DUMMY FILE" to provide to Counsel for preparation of the ANSWER, retrieve the original administrative file, and correct the AIMS status and taxpayer's account in the event a premature assessment has been processed.

  3. Appeals Account and Processing Support (APS) Docket Information Management System (DIMS) Team monitors the Docket Listing and takes action to secure the administrative files that have not been received in Appeals timely.

  4. See IRM 4.8.9.25.6Unlocatable Case Files which provides guidance for Compliance Technical Services (TS) to take when a "petitioned SND" has been defaulted from SND suspense and shipped to Compliance Case Processing (CCP) for assessment.

    • When the file is not received timely by Appeals, the APS DIMS team will identify the case as aging on the DIMS Listing and will contact TS to request the file.

    • TS will take the necessary actions to ensure the return of the original administrative file from Compliance Case Processing (CCP) and will also create a "DUMMY FILE" which they will forward to the DIMS Team for ACDS Carding and transmission to the appropriate Counsel Office.

    • TS, upon return of the original administrative file from CCP, will use Command Code AMCLS to process the case to the Appeals Office aligned with the designated Counsel Office.

    • APS, upon receipt of the original administrative file from TS, will update ACDS to reflect the original administrative file has been received and forward the administrative file to Counsel for association with the "DUMMY FILE" .

  5. See IRM 4.8.9.25.7Status 90 Cases which provides guidance for Compliance Technical Services (TS) to take when a "petitioned SND" has been defaulted from SND suspense, Compliance Case Processing has processed the assessment, and shipped the case to Campus Files.

    • When the file is not received timely by Appeals, the APS DIMS team will identify the case as aging on the DIMS Listing and will contact TS to request the file.

    • TS will prepare a "DUMMY FILE" and forward it to the DIMS Team for ACDS carding.

    • DIMS will update ACDS and forward the "DUMMY FILE" to the appropriate Counsel Office.

    • TS will also input a STAUP (15 cycles) on all prematurely assessed tax periods to suppress balance due notices and collection activity resulting from the premature assessment.

    • TS will take all necessary action(s) to reestablish AIMS controls into the correct AIMS Status.

    • DIMS will request the original administrative file be mailed to the appropriate APS Office from Campus Files via CC:ESTAB

    • DIMS will identify in ACDS Notes that an ESTAB has been input and transfer the ACDS record to the appropriate APS Office

    • APS has the responsibility to abate premature assessments and upon appropriate notification from Counsel or the ATE, APS will reverse the premature assessment and verify that a TC 520 CC 72 is placed on the account to establish the Litigation Freeze.

    • Upon receipt of the original administrative file, APS will update ACDS to correct all applicable fields including the Statute Date and Statute Code as well as verify that AIMS controls are in the correct Status.

    • APS will forward the administrative file to Counsel for association with the dummy file.

8.20.6.10.1  (09-11-2013)
Statutory Notices Issued by Compliance - Counsel Returns Dummy File After Answer for Appeals Consideration (8.4.1.8.4)

  1. If no administrative file is received and Counsel answers the petition using the dummy file documents, then Counsel will include a copy of the petition, answer, Designation of Place of Trial, and any other pertinent information from the legal file, in the dummy file. Counsel will then send the dummy file for consideration DIRECTLY to the Appeals office and ATM identified in the orange Cover Sheet APS previously placed on top of the dummy file.

  2. See IRM 8.4.1.13, Docketed Case For Assignment and Consideration After Answer.

8.20.6.11  (09-11-2013)
Docketed Case Refund or Credit While Case is Pending (8.4.1.31.2)

  1. The Internal Revenue Service Restructuring and Reform Act of 1998 (RRA 98) added IRC 6512(a)(6) and amended IRC 6512(b) to give the federal courts jurisdiction to order a refund of certain amounts while an appeal of a Tax Court decision is pending.

    1. If the Tax Court determines both an overpayment and a deficiency, the Service may refund or credit the uncontested portion of the overpayment while the appeal is pending.

    2. If the Service does not refund or credit the uncontested portion of the overpayment, the taxpayer may bring an action in Tax Court, District Court, or the United States Court of Federal Claims to recover that amount.

  2. When Appeals receives a letter from Counsel directing that an uncontested overpayment should be refunded or credited to the taxpayer, APS will manually process this credit or refund and retain the litigation freeze code on the taxpayer’s account unless a bond was filed as outlined below.

  3. APS will process the refund using Manual Refund Procedures. The letter from Counsel will serve as the authority for initiating the manual refund. The TC 520 Litigation Freeze must be retained on the taxpayer's account currently under the Tax Courts jurisdiction.

8.20.6.12  (09-11-2013)
Identifying Source of SND on TLCATS (8.4.2.4)

  1. See IRM 8.4.2.4 for additional information regarding identifying the source of the Statutory Notice of Deficiency (SND) on the Tax Litigation Counsel Automated Tracking System (TLCATS).

8.20.6.12.1  (09-11-2013)
Appeals Office Administrative File Location on TLCATS (8.4.2.4.1)

  1. The Appeals office "administrative file location" is distinguished on TLCATS by a three character code that begins with the letter "A" followed by a two-digit code Appeals Office Code (AOC). The code appears in the "ADM FILE LOC" field.

  2. All offices performing TLCATS research are able to identify the Campus Appeals Office by the following codes:

    ADM FILE LOC CODE Campus Appeals Office
    A93 Fresno
    A95 Brookhaven
    A96 Cincinnati
    A97 Memphis
    A98 Ogden
    A99 Philadelphia

  3. The administrative file location is updated by TLCATS Operators when the administrative file location changes and Field Counsel receives notification of the change in location from Appeals.

8.20.6.13  (09-11-2013)
SND DECENT and ORDENT Procedures (8.4.2.8) & (8.4.1.29)

  1. Upon receipt of a TLCATS Listing indicating a "Decision" or "Order" was entered by the Tax Court, the APS Reports Team researches ACDS for all cases listed on the TLCATS document with a Decision/Order entered date.

    IF the case THEN
    Is found on ACDS The APS Reports Team will promptly update the following fields in ACDS:
    ACTION - either DECENT or ORDENT
    TODATE - the date the Decision/Order was entered
    Statute - ACDS will calculate the "DECENT" STATUTE DATE at 150 days from the ACTION TODATE and will populate the STATUTE CODE with 150DAY.
    Promptly fax notification of the Decision/Order entered to the appropriate APS office for assessment action.
    Is NOT found on ACDS The APS Reports Team will:
    Establish controls on ACDS to ensure statute protection.

8.20.6.14  (09-11-2013)
Docketed Cases Settled by Appeals - Forward Decision Documents to Counsel (8.4.1.23)

  1. When the administrative file and approved Form 5402 are received for a settled case, APS will take the following actions:

    1. Examine the file to ensure that all returns, documents, and other papers are included.

    2. Place the Form 5402 with the administrative file following local procedures for copy and location requirements.

    3. Retain any remaining copies of Form 5402 in APS for distribution after Counsel notifies Appeals that the stipulation was sent to the Tax Court.

    4. Retain the administrative file in STIPFF suspense or send the administrative file to Counsel, following local procedures.

  2. APS enters action code PREPSTIP or STIPFF and the TODATE (date case placed in STIPFF suspense or sent to Counsel) on the update case/returns screen.

    • PREPSTIP is used when Appeals settles the case, but Counsel will prepare the decision document.

    • STIPFF is used when Appeals settles the case and Appeals prepares and receives the signed decision document.

  3. If the administrative file is sent to Counsel, retain the original and all copies of any Form 5403, Appeals Closing Record, until Counsel returns the file after the decision is entered by the United States Tax Court.

  4. When Counsel returns the administrative file for final closing, check to be sure it includes all returns, documents, and other papers which were in the case file when it was received, plus any returns and papers added while Appeals and Counsel had the case. Documents should be in chronological order with the most recently dated documents on top.

  5. Remove any duplicate material.

8.20.6.15  (09-11-2013)
Docketed Agreed Campus Cases (8.4.2.6)

  1. After the Campus Appeals office secures signed decision documents they forward to Field Counsel:

    1. Two signed decision documents with original signatures for filing with the Tax Court

    2. Approved Form 5402, Appeals Transmittal and Case Memo

    3. Appeals Case Memo (ACM), if prepared in addition to Form 5402

    4. Settlement computation

  2. The Campus Appeals office retains the administrative file until the entered decision is returned.

8.20.6.15.1  (09-11-2013)
Stipulation/Decision Preparation for Docketed Campus Cases (8.4.2.6.1)

  1. See IRM 8.4.2.6.1 for additional information regarding stipulation and decision document preparation.

8.20.6.16  (09-11-2013)
Docketed Case Not Settled by Appeals - Jurisdiction Released to Counsel (8.4.1.24)

  1. When Appeals concludes docketed case consideration without settlement, forward the case to Counsel. Ordinarily a settlement computation is not required in an unagreed docketed case, however, if the ATE raises a new issue or concedes an issue, one might be necessary.

  2. When APS receives the administrative file with an approved Form 5402 releasing jurisdiction, APS will take the following actions:

    1. Examine the file to ensure that all returns, documents, and other papers are included in the folder.

    2. Date Form 5402 in the upper right corner.

    3. Date and mail the letter addressed to the petitioner or representative advising that jurisdiction has been released to Counsel.

    4. Place a copy of the letter, Form 5402 , and the appeals case memo (ACM) in the administrative file.

    5. Follow your local office copy requirements for distribution of the remaining copies of the Form 5402 and appeals case memo (ACM).

  3. For the ATE's purpose, the case is moved from active to suspense inventory (Part 2 to Part 3).

  4. Enter CLOSINGCD 43. (This closing code will move the case to Part 3/Status E/T).

  5. Enter Action Code DCJUR.

  6. Enter the TODATE (date administrative file sent to Counsel).

  7. Transmit the administrative file to Counsel. If Form 2828 , Transmittal Memo, is used, establish a follow-up "tickler" control until Counsel acknowledges receipt of the administrative file.

  8. When Counsel returns the administrative file for final closing, check to be sure it includes all returns, documents, and other papers which were in the case file when it was received, plus any returns and papers added while Appeals and Counsel had the case. Documents should be in chronological order with the most recently dated documents on top.

  9. Remove any duplicate material.

8.20.6.17  (09-11-2013)
Docketed Reconsideration Cases (Closing Code 42) - Jurisdiction Returned to Appeals by Counsel (8.4.1.28)

  1. Counsel and Appeals may agree jurisdiction will be returned to Appeals for settlement in a docketed case with strong likelihood of settlement for all or part of the case.

  2. The reasons for returning the case to Appeals must be well defined, preferably in writing, before Appeals accepts the workunit from Counsel.

  3. If a Campus Appeals office forwards a case to Field Counsel for "trial preparation" and, subsequently, the Petitioner or Counsel of Record wish to discuss "settlement" , presents new information or decides to settle based upon Appeals' settlement offer, Field Counsel may return case jurisdiction to Campus Appeals when all agree there is a strong possibility of settlement and the case is not on a Tax Court calendar.

  4. If the case is on a Tax Court calendar , Field Counsel may return the case to Field Appeals for reconsideration.

  5. If Counsel returns the case to Appeals for reconsideration, Appeals will accept jurisdiction of the case and the following administrative actions should be taken:

    1. APS will update the case from Part 3 to Part 2 on ACDS with input of Closing Code 42.

    2. If an AC/FR was previously input on the Case Activity Record (CAR), the ATM will input **RR to reflect the case is returned to the assigned technical employee. This will change the prior AC/FR to MS. Or, if the case needs to be reassigned to a different technical employee, the ATM will reassign and input **RR on the CAR.

    3. After reconsideration, the ATE will input AC/FR and submit the case to the ATM.

    4. The ATM will input a revised ACAPDATE and submit to APS for closing.

  6. In all cases Appeals:

    1. is responsible for any "reconsideration" activities and

    2. conducts the settlement negotiations.

    Note:

    Any docketed case originally considered by Campus Appeals but returned by Field Counsel to a Field Appeals office for reconsideration/reinstatement must be immediately routed to APS. APS will ensure that the AIMS and ACDS databases reflect the Appeals Office handling the reconsideration. APS will also ensure that ACDS is updated to Part 2 from Part 3, to properly reflect Appeals jurisdiction and to maintain Appeals statute controls.

    Note:

    Any docketed case returned by Field Counsel directly to an ATE for reconsideration/reinstatement must also be immediately rerouted to APS. APS will update ACDS to Part 2 from Part 3, to properly reflect Appeals jurisdiction and to maintain Appeals statute controls.

  7. When the case is in Counsel's jurisdiction, it is in Part 3 on ACDS. When the case is returned to Appeals for reconsideration, APS inputs Closing Code 42 and a date closed equal to the date the case is received for reconsideration. This changes the "Part" on the open ACDS record from 3 to 2. The closed ACDS record retains Part 3 and the closing information.

  8. The following procedures are followed by APS when processing the returned workunits:

    1. Select the Special Activities Menu in ACDS. Then select Closing Code 42/43 update.

    2. CLOSINGCD = 42.

    3. DATECLSD = today's date.

    4. FROMDATE = date case returned from Counsel. Entering the FROMDATE will automatically remove the case from the DCJUR follow-up list.

8.20.6.18  (09-11-2013)
United States Tax Court Calendars for Trial Sessions (8.4.1.25)

  1. The United States Tax Court (Tax Court) regularly issues calendars for trial sessions. The calendars list petitioner(s) names, case docket numbers, trial session date and location (city and state). A trial session’s calendar also lists cases in which motions are calendared for hearing at a trial session.

  2. The Tax Court posts all session schedules to its web site, http://www.ustaxcourt.gov.

  3. Tax Court judges sometimes issue orders requesting specific actions by the IRS that may impact Counsel/Appeals calendar time frames or document submissions. Appeals employees should pay particular attention to the requirements of any orders of this nature issued by a Tax Court judge.

8.20.6.18.1  (09-11-2013)
ACDS Tax Court Calendar Program (TAXCAL) (8.4.1.25.2)

  1. The Tax Court Calendar program (TAXCAL) is a sub-system of ACDS developed and maintained by Appeals.

  2. The ACDS Tax Court Calendar (TAXCAL) program provides Appeals offices with a method to identify and monitor Tax Court calendar cases and generate Tax Court calendar reports within ACDS.

  3. As soon as a calendar is established, Counsel provides Appeals with an electronic file for each Tax Court Calendar to upload into TAXCAL. Fresno APS is responsible for uploading all Tax Court Calendars onto TAXCAL.

  4. The ACDS Tax Court Calendar functionality is menu based and user-friendly. Based upon the permissions of the user, the program allows appropriate functionality.

  5. The ACDS permissions levels for Tax Calendar are as follows:

    1. (14000) Tax Calendar

    2. (14100) Tax Calendar, User

    3. (14200) Tax Calendar, Coordinator

    4. (14300) Import Electronic Calendar - restricted permission

  6. ACDS' web-based technology allows the program to match a docket number to any case on ACDS, in any Appeals office.

  7. A calendared case input on a Tax Court calendar created in any Appeals office will appear on the appropriate group's or ATE's report.

  8. The TAXCAL program provides the following functionality:

    • Ability to electronically import or manually create an ACDS Tax Court Calendar;

    • Matching calendar cases to ACDS cases and providing a status report for Counsel;

    • Notification to the assigned ATE when the case appears on a calendar;

    • Link on the TAXCAL record to e-mail the calendar coordinator or assigned ATE; and

    • Ability to add comments to the TAXCAL record.

  9. Tax Court Calendars are the responsibility of both the Field Appeals and the Campus Appeals offices.

  10. A TAXCAL report listing all Dockets on the calendar in Docket Number order should be generated by the Field Appeals office and faxed to the Field Counsel responsible for the calendar within five business days of receipt of the calendar. This list shows the name of the ATE assigned to the case and if the case is unassigned or unmatched. The Field Appeals office is responsible for resolving unassigned or unmatched cases.

  11. Appeals provides Field Counsel with periodic calendar status reports. The Appeals Office responsible for the calendar generates the report monthly. These calendar status reports are generated from TAXCAL and provide the following information:

    • Name of the docketed case;

    • TIN of the docketed case;

    • Docket number;

    • Name of the ATE assigned the case, if assigned;

    • Attorney/paralegal assigned to the case as shown on ACDS;

    • Closing code and date closed, if applicable; and

    • "Status" of the case

  12. The report is forwarded to each Field Counsel responsible for the calendar. Field Counsel updates the list with the name of the attorney/paralegal assigned to the case within two workdays from the date of receipt of the list. Field Counsel delivers or faxes the list back to the Appeals office responsible for the calendar so that the ACDS database can be updated with the corrections. Subsequent lists contain those corrections.

  13. The TAXCAL Users' Manual is posted on the Appeals web site on the ACDS page.

8.20.6.19  (09-11-2013)
Dismissed Cases (8.4.1.30)

  1. A distinction must be made between cases dismissed for lack of jurisdiction and cases dismissed for lack of prosecution.

  2. A dismissal for lack of jurisdiction is not a determination on the merits, and the Order of Dismissal does not reflect a deficiency amount.

  3. A dismissal for lack of prosecution is considered to be a final determination on the merits, and the Order of Dismissal includes a deficiency amount.

8.20.6.19.1  (09-11-2013)
Dismissed for Lack of Jurisdiction (8.4.1.30.1)

  1. The Tax Court may dismiss a case for lack of jurisdiction for a variety of reasons such as:

    1. The petition was not filed timely,

    2. The petitioner did not pay the filing fee,

    3. A notice of deficiency or notice of determination was not issued.

  2. Generally a Tax Court dismissal for lack of jurisdiction does not favor the taxpayer, however: the dismissal can be based on circumstances that do favor the taxpayer. For example, a deficiency notice may be determined to be invalid because it was not sent to the taxpayer's last known address. The Tax Court lacks jurisdiction over a case that is based upon an invalid notice.

    1. These situations need to be handled on a case by case basis.

    2. If the statute of limitations is still open, Appeals may request that the notice of deficiency be reissued to the correct address.

  3. Each Appeals office designates an employee with responsibility for review of dismissed cases prior to assessment. In the following circumstances, the ATM considers assigning the case to an ATE and assessing an amount less than shown on the notice of deficiency:

    1. There is information in the file, not considered by the originating function, which, if considered, would have resulted in a reduction in the tax determined in the statutory notice of deficiency.

    2. The taxpayer provided information not previously available and either Area Counsel or the Tax Court requested that consideration be given to assessing a reduced amount.

    3. There is a clear misapplication of the law which led to an excessive deficiency determination in the statutory notice.

  4. Appeals will not, on its own initiative, contact taxpayers for the purpose of exploring adjustments to the amount of tax determined in the notice of deficiency prior to assessment unless circumstances favor the taxpayer (as described in paragraph (2)).

  5. As a general rule, unless unusual circumstances exist, if a taxpayer contacts Appeals and requests an adjustment after Appeals has made an assessment and closed the case, the taxpayer is advised to request an audit reconsideration with Compliance.

8.20.6.19.2  (09-11-2013)
Dismissed for Lack of Prosecution (8.4.1.30.2)

  1. Appeals gives no further consideration to cases that are dismissed by the Tax Court for lack of prosecution.

8.20.6.19.3  (09-11-2013)
Dismissal Order is Vacated (8.4.1.30.6)

  1. There may be instances in which a taxpayer is successful in having an Order of Dismissal vacated.

  2. In these circumstances, normal appeals consideration is appropriate.

8.20.6.20  (09-11-2013)
Appeal of Tax Court Decision (8.4.1.31)

  1. A Tax Court decision in a regular case can be appealed by either the petitioner or the U.S. Government. Counsel holds tried case files for 90 days after the Tax Court decision is issued. Follow the procedures below if an appeal is filed within the 90-day period.

8.20.6.20.1  (09-11-2013)
Assessment of Deficiency Determined by the Tax Court (8.4.1.31.1)

  1. If the case goes to the Court of Appeals (Appellate Court), the deficiency determined by the Tax Court can be assessed and collected unless the petitioner files an "appeal bond" (also called a review bond) with the Tax Court. The appeal bond must be in an amount fixed by the Court on or before the time the notice of appeal is filed. No assessment is made if the bond is filed.

  2. An appeal bond is not the same as an IRC 6603 . The appeal bond is an irrevocable, open-ended promise by the taxpayer to pay the tax, additions to tax, and interest determined to be due. The taxpayer will provide security for the bond, which is not posted to the taxpayer's account.

  3. The docket attorney from Counsel’s Field office has the responsibility to ensure prompt assessment of the tax, generally within 60 days after the decision of the Tax Court becomes final. Counsel will notify Appeals when the decision becomes final (after the case is finished in the Court of Appeals and/or Supreme Court).

8.20.6.20.2  (09-11-2013)
Appeal Filed by Petitioner, Bond Filed (8.4.1.31.3)

  1. Counsel notifies APS if a petition was filed in Appeals Court and if a bond was filed. If a bond was filed, APS will take the following actions:

    1. Enter action code APPEALED and the TODATE on the update case/returns screen. Offices that wish to further identify the case as an appealed Tax Court case may enter a local "LACTION" code and local "TODATE" .

    2. File the copy of the notification (Form 2237 or TLCATS transmittal) in a follow up file.

  2. Once the Counsel attorney receives notification that the decision has become final, he/she will notify Appeals and request an assessment.

    1. The Counsel attorney immediately delivers the administrative file to Appeals, using Form 1734 , Transmittal Memorandum, with an annotation, "Tax Court Case/Assessment must be made before [date]."

    2. The PTM is responsible for ensuring that APS processes the assessment.

8.20.6.20.3  (09-11-2013)
Appeal Filed by Petitioner, No Bond Filed (8.4.1.31.4)

  1. If the petitioner files a notice of appeal but does not file a bond, the tax must be assessed. Assessment should be made even if the tax is paid.

    1. The attorney contacts the PTM and immediately delivers the administrative file using Form 1734 , Transmittal Memorandum, noting, "Appealed Tax Court Case/Assessment must be made."

    2. APS is responsible for preparing Form 5403, Appeals Closing Record, and processing a partial assessment of the tax.

    3. The earliest assessment statute is 60 days after the Tax Court decision becomes final. The Tax Court decision becomes final after the Appeals Court case (or Supreme Court case) has been completed. Therefore, a quick assessment is not necessary unless notification has been received that the Tax Court decision has become final (the IRC 6213(a) paragraph will not be on this decision so there is no agreement date).

  2. After the Form 5403 is prepared and the statute is recomputed, APS will process the administrative file as follows:

    1. Verify that the amount of deficiency and/or penalty reflected in the decision agrees with the amounts in Item 12 of Form 5403.

    2. Forward a copy of the first page of the return, together with Form 5403, for an interim assessment.

    3. If it is a master file return, input TC 521 Closing Code 72 (which will reverse the TC 520 closing code 72 and initiate collection activity).

    4. Enter action code INTERIM and the date sent to APS for assessment (TODATE) on the update case/returns screen.

    5. When verification is received enter the date in the FROMDATE on the update case/returns screen.

    6. Send the administrative file and verification of the assessment (transcript with posted assessment – not a pending assessment) back to Counsel for the taxpayer’s appeal. Note on the transmittal the verification of the assessment is attached and needs to be forwarded to Assistant Chief Counsel. Enter action code APPEALED and the TODATE on the update case/returns screen. On the returns screen, change the statute code from DOCKT to ASESD. Offices that wish to further identify the case as an appealed tax court case can enter a LACTION and LTODATE.


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