8.21.3  Appeals Technical Employees Statute Responsibility

Manual Transmittal

December 24, 2013

Purpose

(1) This transmits revised Internal Revenue Manual (IRM) 8.21.3, Appeals Technical Employees Statute Responsibility.

Material Changes

(1) Editorial changes made throughout the text to clarify and improve guidance.

(2) IRM 8.21.3.1 - Expanded the note to reference CDP guidance.

(3) IRM 8.21.3.1.3.1 (3)(a) & (b) - Included reference to deadlines imposed with issuance of Letter 967 and instruction for proper selection of CARATS codes.

(4) IRM 8.21.3.1.3.1 (3) (b) - Added instruction to use new Appeals consent follow up letter.

(5) IRM 8.21.3.1.3.8 (4) - Revised to remove the requirement to notify Compliance of a short CSED.

(6) IRM 8.21.3.1.3.22 - Added guidance for Excise Tax cases assessed under IRC 6206.

Effect on Other Documents

This supersedes IRM 8.21.3 dated August 15, 2012.

Audience

Appeals

Effective Date

(12-24-2013)


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

8.21.3.1  (12-24-2013)
General Guidelines for Appeals Technical Employees

  1. Appeals Technical Employee (ATE) is defined in IRM 8.1.1-1.

  2. ATEs are responsible for protecting assessment statutes and monitoring collection statutes on all cases assigned to them. Their responsibilities are to:

    1. Monitor statutes on non-docketed cases they send to Counsel.

    2. Verify suspended statutes to ensure they fit the suspension criteria.

    3. Ensure the accurate statute is reflected on Appeals Centralized Database System (ACDS). When an ACDS statute update, modification or change is needed, the ATE will use the Statute Validation Tracking System (SVS) in ACDS to update, modify or change the statute critical data field.

      Statute Critical Data Fields
      (1) Tax Period
      (2) Statute Date
      (3) Statute Code

      Note:

      Generally, this procedure will not apply to collection statute expiration dates (CSEDs). See IRM 8.22.4.2.3 Statute Responsibility in CDP, for guidance.

  3. If an ATE is not in the office, absent a factor outside the technical employee's control, such as an emergency, they must notify their Appeals Team Manager (ATM) of any action needed to protect a short statute in their absence.

8.21.3.1.1  (04-20-2012)
New Receipts and Transfers

  1. Within five (5) business days from receipt of the case, the ATE must review the file to validate that all statute dates are correctly shown on ACDS. This includes the verification of the original statute, as well as validation of all extensions. Verifying the statute date in ACDS signifies that the ATE has reviewed the available source documents, IDRS, and completed any necessary research. If the ATE determines that the statute date reflected on ACDS is not correct and changes are necessary, the ATE must update the statute critical data fields using the SVS. See IRM 8.21.3.1.1.1, Procedures to Update Statutes on ACDS.

  2. Since many cases are transferred due to workload considerations, additional consideration is necessary with respect to special consents. If the preliminary review indicates one or more statutes are extended using a Form 872-A, Form 872-IA, Form 872-O, or Form 872-R special consent, mail Form 872-U, Change of IRS Address to Submit Notice of Termination of Special Consent to Extend the Time to Assess Tax, to the taxpayer.

    Note:

    Form 872-I and Form 872-IA are obsolete with the October 2009 revisions of Form 872 and Form 872-A.

  3. An entry in the Case Activity Record (CAR) is made automatically by the Statute Validation System when a statute validation has been completed. A sub-action code entry of "VA" , with the date of validation, is added to the CAR for every workunit in the case. The "VA" entry on the CAR will indicate that the ATE has verified the statute date on ACDS. Any further explanations or unusual circumstances should be documented in the CAR.

  4. If the statute date shown on ACDS is incorrect, the ATE will use the "Validations" link at the bottom of the Case Summary Card screen to access the SVS menu. Select ATE-Statute from the list to proceed to the Statute Validation screen and make the necessary updates to the statute date or statute code.

  5. If assigned a docketed case, the ATE must review the following documents to verify that the non-petitioning spouse (NPS) and all non-petitioned years (NPY) are assessed:

    1. Form 5403 with a noted DLN and 23C date.

    2. TXMOD/IMFOL/BMFOL showing the assessment.

  6. ATEs should request a transcript every six months on any tax period with an ACDS statute code "SUB" to determine if a return was filed by the taxpayer. The filing of a return starts the running of a live statute from the date the return is received.

  7. ATEs are responsible for monitoring their time sheet and monthly statute lists to ensure all statute updates, modifications and changes are correctly updated on ACDS and are noted correctly in the Validation Tracking Log (VTL).

8.21.3.1.1.1  (04-20-2012)
Procedures to Update Statutes on ACDS

  1. All changes to the statute critical data fields (tax period, statute date and statute code) may be made from the Statute Validations screen. Once the changes are entered and the validation is submitted, the return is updated on ACDS and a log entry is made in the Validation Tracking Log.

  2. If the tax period also requires an update to the AIMS database or any other system as a result of the updated statute critical data field, the ATE will submit a request to the PTM for the AIMS update via the SVS. The ATE will select the appropriate office and PTM from the drop-down list in the SVS system to submit the request to the PEAs inbox.

    1. If the ATE does not receive confirmation of the AIMS update within five (5) business days, the ATE will contact the PTM who received the original update request for resolution.

  3. If there is doubt as to the correct statute date, enter the earliest date determined. Immediately correct ACDS using SVS if a change is required.

8.21.3.1.2  (04-20-2012)
Monthly Statute Report for Appeals Technical Employees

  1. ATEs will generate a monthly 180-day Statute Report from ACDS on their inventory of cases. They will annotate the list by the 5th business day of the month with appropriate status/actions to be taken and submit it to the ATM. The comments will include the date consents were solicited, received and updated on ACDS by the ATE.

  2. ATEs must notify their ATM of any previously submitted cases appearing on the list with 45 days or less remaining on the statutory period. In these instances, the ATM will follow-up with the PTM to confirm the case will timely close.

  3. The ATE will notify their ATM if any case appears on the 180-day Statute Report that was submitted for closing within the past 60 days.

8.21.3.1.3  (04-20-2012)
Protecting the Statute

  1. The ATE must determine whether a statute requires protection to ensure the statutory period for assessment does not expire. The statute is protected by the following actions:

    1. Assess the appropriate deficiency or overassessment on an agreed case.

    2. Secure a consent to extend the statute of limitations.

    3. Issue a statutory notice of deficiency.

  2. Consider seeking advice from Counsel when unusual or complex consent/statute questions arise.

  3. Once an employee determines that a consent is needed, every effort should be made to obtain at least a six-month extension of the statutory period.

  4. If the taxpayer requests an extension period that is shorter than needed to complete the appeal and other administrative actions, Appeals is not compelled to agree to such period.

  5. Both the taxpayer and Appeals have the right to determine what they will agree to in the consent.

8.21.3.1.3.1  (12-24-2013)
Protecting Statutes, General Guidelines

  1. Generally cases are received with ample time left on the statute to resolve the issues and close the case. Initiate statute protection when it is determined that resolution of the case may not occur within the specified time frame.

  2. The protection can be initiated at any time; however, when there are at least 150 days left on the statute and it has been determined that no settlement will be reached, the ATE must protect the statute by securing a consent or initiating preparation of a Statutory Notice of Deficiency (SND).

  3. Below are time-frames to follow:

    1. Solicit a consent from the taxpayer or authorized representative no later than 150 days before the statutory period expires. The consent is solicited with Letter 967, Consent Extending Period of Limitation Transmittal, and the taxpayer is required to return two copies of the signed consent form within two weeks from the date of Letter 967. The ATE should document consent solicitation with ACDS CARATS action and sub-action code, CO-CS

    2. Follow-up must be made within 30 days. It is strongly recommended to follow up two weeks after the date of Letter 967 to ensure receipt of the consent by 120 days before the statutory period expires. Use Letter 928-A , Statute of Limitation Consent Follow-Up for Appeals, to perform follow up action with the taxpayer. The ATE should document this and other related consent activity with ACDS CARATS action and sub-action code SW-CW

    3. If the 30 days elapse and there are only 120 days remaining on the statute and a consent has not been secured, consult with the ATM to determine whether to continue working on the case or to initiate preparation of an SND. Written permission from the ATM is required to keep a case beyond the 120 day guideline. Granting permission does not address the performance aspects of the employee's Critical Elements.

    4. If 90 days remain on the statute and no consent is received, immediately initiate preparation of SND. Notify the ATM, PTM and Appeals Tax Computation Specialist Manager (ATCTM) by secure email that the case is being submitted for SND preparation.

    5. If a consent is received while the case is in TCS for preparation of a SND, immediately notify the ATCTM to withdraw the work request.

8.21.3.1.3.2  (04-20-2012)
Protecting Statutes on Estate Tax Cases

  1. Statute dates on estate tax cases cannot be extended by consent under any circumstance. Since many new estate tax cases are received in Appeals near the 180-day deadline for accepting cases, the time to consider and resolve an estate tax case may be very limited.

  2. ATEs must consult with their ATM on any estate tax case that has only 120 days remaining on the statute. Written permission from the ATM is required to keep a case beyond the 120-day guideline. It is recognized that under these guidelines, a statutory notice of deficiency may need to be prepared even though Appeals consideration is just getting underway. Granting permission does not address the performance aspects of the employee's critical elements.

  3. Follow the time frames below. However, if a settlement is imminent, the ATM and ATE should discuss whether to allow more time in order to proceed to preparing a settlement computation, rather than preparing an SND.

    1. Initiate preparation of SND when no settlement is reached and only 90 days remain on the statute.

    2. Notify the ATM, PTM and the ATCTM by secure email that the case is being submitted for SND preparation with only 90 days remaining on the statute.

8.21.3.1.3.3  (10-01-2012)
Consent Processing

  1. ATEs should follow the guidelines established in IRM 25.6.22.5, Preparation of Consent Forms - General Procedures, when preparing consent forms. Refer to IRM 25.6.22.6, Preparation of Consents for Specific Entities and Taxes, to determine the proper consent form and language to use for specific cases. For open-ended consents, refer to IRM 25.6.22.7, and for restricted consents refer to IRM 25.6.22.8. Refer to Delegation Order 25-2 effective July 6, 2009, found in IRM 1.2.52.3, for delegated officials authorized to sign the consent form.

  2. When soliciting a consent from the taxpayer, make certain that the consent form contains the notification required by IRC 6501(c)(4)(B) and

    1. mail or present to the taxpayer a completed and dated Letter 967, Letter Transmitting Consent Extending the Period of Limitation, along with the properly completed consent form, which contains the notice of taxpayers' rights ANDPublication 1035, Extending the Tax Assessment Period; and

    2. mail copies of the same documents to the properly authorized representative, if the taxpayer is represented.

      Note:

      IRC Section 6501(c)(4)(B) requires that these procedures be followed EACH time the taxpayer is requested to extend the period of limitations.

    3. The ATE should select the ACDS CARATS action and sub-action code CO-CS at the time the consent is mailed or presented to the taxpayer.

  3. Section 3201(d) of the Internal Revenue Service Restructuring and Reform Act of 1998 (RRA 98) requires the Service, whenever practicable, to send any notice related to a joint return separately to each individual filing a joint return. If the ATE is able to verify that both spouses live at the same address, sending only one consent form and Letter 967, Letter Transmitting Consent Extending Period of Limitation is acceptable.

  4. To verify that both spouses live at the same address, the Appeals Technical Employee must verify (either by phone or in person) during the first contact that the last known mailing address is still correct for each spouse.

    1. One consent form signed by both spouses or two consent forms signed by each spouse is sufficient verification that both spouses received notice of their rights.

    2. If a consent form is received with only one signature, it cannot be determined with any certainty that the other spouse received the required notice of their rights. In this case, the employee must contact the non-signing spouse to determine why there was only one signature on the consent form. The employee will obtain a correct address and send a separate consent form and Letter 967 to the spouse who did not sign the consent form.

    3. If the ATE is unable to verify that both spouses live at the same address, the Service must send the consent form and the Letter 967 separately to each individual filing a joint return.

  5. When a valid, signed consent is received from the taxpayer or authorized representative, the ATE or other delegated individual will execute the consent by signing and dating the consent. The ATE will update the statute on ACDS using the Statute Validation menu. See IRM 8.21.3.1.1.1 for procedures to update statutes in ACDS. The ATE should select the ACDS CARATS action and sub-action code CO-CR at the time the valid signed consent is received from the taxpayer or authorized representative.

    Note:

    Where contact with the taxpayer has been made and documented, faxed signatures are legally sufficient. However, consents to extend the statute of limitations for assessing tax will not be accepted via fax in normal operations.

  6. Account and Processing Support (APS) will update the statute on AIMS within 5 business days of receipt of the update request from the ATE.

  7. If the statute is not updated on AIMS within 5 business days of the notification, the ATE is responsible for contacting the PTM for resolution.

  8. The ATE takes the following steps:

    1. Prepare Letter 968 and send it to the taxpayer and the authorized representative with a copy of the executed consent.

    2. Attach a copy of the executed consent to each affected tax return.

      Note:

      It is no longer a requirement to attach Letter 967 to each affected return since the taxpayers' notice of rights is located directly above the signature lines of the consent form. However the letter must be attached if the Power of Attorney signs the consent on behalf of the taxpayers.

    3. When the designated individual shown on the Power of Attorney signs the consent form on behalf of the taxpayers, attach a copy of the Letter 967 that was mailed to the taxpayer to the returns, along with the executed consent form, as this will verify that the taxpayer was provided their rights.

    4. Annotate the Case Activity Record (CAR) that consent form, Letter 968 and Publication 1035, Extending the Tax Assessment Period, were sent to the taxpayer and representative, if applicable.

  9. Consents pertaining to returns (including dummy returns where the original return was not available) under the control and jurisdiction of Appeals are prepared, executed, and accepted in duplicate. Attach the original executed consent to the reverse side of the front page of the latest year's return. Attach copies of the executed consent to the reverse side of the front page of the return of the other years covered in the consent.

    1. When the original executed consent must be forwarded to another office to be affixed to the return, retain a copy of the consent in the office file for use in the event the original is not received by the addressee.

  10. If required consents are not obtainable, or are not acceptable, Appeals issues a notice of deficiency for those taxes subject to a petition to the United States Tax Court, and takes necessary action to protect the interests of the Government for all other taxes. See IRM 8.7, Technical and Procedural Guidelines, with references to criminal prosecution cases.

  11. Never alter the extension date on the consent form. Prepare new consents if the date is in error or needs to be changed.

  12. When prepayment credits are overstated, the ATE determines whether a different statutory period of limitation applies to such credits and takes action to protect the Government’s interest. When claimed prepayment credits are understated and expiration of the statutory period of limitation is imminent, invite the taxpayer, in writing, to file a claim for refund to protect his or her interests.

  13. Scrutinize the signed consent form for any unauthorized alterations. Inform your ATM of any unauthorized alterations.

  14. If income tax and other taxes are involved, indicate each type of tax in the "kind of tax" portion of the consent form.

    For example, one of the issues on a Form 1040 may involve an individual retirement account (IRA). The IRA issue may give rise to a Chapter 43 excise tax. If the "kind of tax" line of the consent is completed only for "income tax," the statutory period for assessing any Chapter 43 excise tax deficiency may expire, barring the assessment. Thus, in the above example, the "kind of tax" on the consent form should read "income and Chapter 43."

  15. Follow all of the above procedures each time a consent is solicited.

8.21.3.1.3.4  (04-20-2012)
Consent Forms

  1. On October 30, 2009, Form 872 and Form 872-A were revised to incorporate the language previously contained on Form 872-I and Form 872-IA relating to partnerships/S corporations and adjusted items on investor tax returns. Form 872-I and Form 872-IA are obsolete effective with the October 2009 revision of Form 872 and Form 872-A.

  2. Form SS-10, Consent to Extend the Time to Assess Employment Taxes.

  3. Form 872, Consent to Extend the Time to Assess Tax.

  4. Form 872-A, Special Consent to Extend the Time to Assess Tax.

  5. Form 872-AP, Consent to Extend the Time on Assessment of IRC Section 6695A Penalty.

  6. Form 872-B, Consent to Extend the Time to Assess Miscellaneous Excise Taxes.

  7. Form 872-D, Consent to Extend the Time on Assessment of Tax Return Preparer Penalty.

  8. Form 872-EC, Consent to Extend the Time on Assessment - Section 6676 Erroneous Claim for Refund or Credit Penalty.

  9. Form 872-F, Consent to Extend the Time to Assess Tax Attributable to Items of a Partnership or S Corporation That Have Converted Under Section 6231(b) of the Internal Revenue Code.

  10. Form 872-I, Consent to Extend the Time to Assess Tax As Well As Tax Attributable to Items of a Partnership.

    Note:

    Form 872-I is obsolete with the October 2009 revision of Form 872.

  11. Form 872-IA, Special Consent to Extend the Time to Assess Tax and Tax Attributable to Items of a Partnership.

    Note:

    Form 872-IA is obsolete with the October 2009 revision of Form 872-A.

  12. Form 872-N, Notice of Termination of Special Consent to Extend the Time to Assess Tax Attributable to Partnership Items.

  13. Form 872-O, Special Consent to Extend the Time to Assess Tax Attributable to Partnership Items.

  14. Form 872-P, Consent to Extend the Time to Assess Tax Attributable to Partnership Items.

  15. Form 872-Q, Notice of Termination of Special Consent to Extend the Time to Assess Tax Attributable to Items of an S Corporation. Form is obsolete effective April 11, 2008.

  16. Form 872-R, Special Consent to Extend the Time to Assess Tax Attributable to Items of an S Corporation. Form is obsolete effective April 11, 2008.

  17. Form 872-S, Consent to Extend the Time to Assess Tax Attributable to Items of an S Corporation.

  18. Form 872-T, Notice of Termination of Special Consent to Extend the Time to Assess Tax.

  19. Form 872-U, Change of IRS Address to Submit Notice of Termination of Special Consent to Extend the Time to Assess Tax.

  20. Form 977, Consent to Extend the Time to Assess Liability at Law or in Equity for Income, Gift, and Estate Tax Against a Transferee or Fiduciary.

  21. Form 900, Tax Collection Waiver.

  22. Form 2750, Waiver Extending Statutory Period for Assessment of Trust Fund Recovery Penalty.

  23. Form 9247, Agreement to Extend the Time to File a Civil Action for Refund by Partner with Respect to Partner's Partnership Items.

  24. Form 9248, Agreement to Extend the Time to File a Petition for Adjustment by the Tax Matters Partner with Respect to Partnership Items.

8.21.3.1.3.5  (08-14-2007)
Consents in Gift Tax Cases

  1. In each gift tax case in which a husband and wife elect to split their gifts pursuant to IRC 2513, prepare two sets of consent agreements in duplicate for each taxable year using Form 872 or Form 872-A. Prepare one set for the husband as donor with the wife as consenting spouse, and another set for the wife as donor with the husband as consenting spouse. The signature of both spouses must appear on all the forms.

8.21.3.1.3.6  (08-14-2007)
Consents When Cases Are Transferred to Counsel

  1. When jurisdiction of a case is transferred to Counsel, then Counsel becomes responsible for controlling the statute on any returns in the file or for any returns requisitioned. Prominently reflect that Counsel now has control of the statutes in the remarks section of Form 2828, Transmittal Memorandum, or in Item 11 of the Form 5402, Appeals Transmittal and Case Memo. Counsel may request that Appeals execute the consents that they secure.

8.21.3.1.3.7  (04-20-2012)
Cases Where a Consent Is Not Necessary

  1. If the ATE determines that a consent is not necessary, the ATE must:

    1. Complete Form 10495, Memorandum Re Statute, when at least 120 days remain on the statute and no statute protection is necessary.

    2. Secure the ATM's counter signature.

    3. Attach a copy of the Form 10495 to each affected tax return.

    4. Update the ACDS statute code to "10495" using the Statute Validation Menu.

    5. Refer to IRM 8.21.3.1.1.1 for procedures to update statutes on ACDS.

8.21.3.1.3.8  (12-24-2013)
Consent to Extend Collection Period of Limitation

  1. IRC 6502 provides that the length of period for collection after assessment of a tax liability is generally ten years. IRM 5.1.19, Field Collecting Procedures - Collection Statute Expiration, provides the reasons for Collection Statute Expiration Date (CSED) suspensions.

  2. The Restructuring and Reform Act of 1998 (RRA 98), enacted on July 22, 1998, amended IRC 6502(a) to eliminate the Service's authority to extend the collection statute of limitations by agreement for requests made after December 31, 1999. Any extension of the collection period already in effect on December 31, 1999, expires on the later of the last day of the 10-year collection period in IRC 6502(a) or December 31, 2002. There is an exception for extensions relating to the acceptance of an installment agreement. Refer to IRM 5.14.2, Partial Payment Installment Agreements and the Collection Statute Expiration Date (CSED).

  3. Delegation Order No. 25–2 delegates the authority to execute agreements to extend the period of limitations on assessment or collection and to accept Form 900, Tax Collection Waiver. Refer to IRM 1.2.52.3. If Appeals secures an extension of the statutory period for collection using Form 900, Tax Collection Waiver, prepare the form in accordance with IRM Part 5, Collecting Process.

  4. Settlement Officers and/or Specialists should document their Case Activity Record of imminent CSEDs. Refer to IRM 8.21.5.

8.21.3.1.3.9  (04-20-2012)
Consents Where the Sole Issue is Restricted Interest

  1. Appeals considers cases where the taxpayer does not agree to a potential deficiency or overassessment even though, as a result of carrybacks, there is no deficiency or overassessment. In such instances assessment of restricted interest may have to be made.

  2. Assess restricted interest on potential deficiencies (before allowance of carrybacks) within the period of limitations applicable to the tax even though the deficiency in tax was eliminated by the carryback.

  3. If a consent cannot be obtained or if the consent secured is not acceptable, complete a Form 2285, Concurrent Determinations of Deficiencies (Increases in Tax) and Overassessments (Decreases in Tax) in Cases Involving Restricted Interest Provisions of the Internal Revenue Code, and a Form 5403, Appeals Closing Record. Generally, Form 2285 is prepared by the Appeals Tax Computation Specialist (TCS).

  4. Forward the case to the appropriate APS Office for computation and assessment of the restricted interest.

8.21.3.1.3.10  (04-20-2012)
Consents for Tax Exempt Organization Cases

  1. Unrelated Business Income Tax — Unrelated business income tax under IRC 511 is reported on Form 990-T, Exempt Organization Business Income Tax Return. The period of limitations on assessment of unrelated business income tax begins when the tax exempt organization files the information return (Form 990-PF, Form 990, or Form 990-EZ) or on the due date of such information return, whichever date is later. If the period of limitations on assessment is expiring, secure the necessary consents from the tax exempt organization on Form 872.

  2. Income Tax on Revoked Organizations — An organization whose tax exempt status under IRC 501(a) is revoked is subject to income tax under IRC 11, unless it is a trust subject to tax under IRC 641. The period of limitations on assessment of income tax generally begins when the tax exempt organization files the information return (Form 990-PF, Form 990, or Form 990-EZ) or on the due date of the information return, whichever date is later. IRC 6501(g)(2). If the period of limitations on assessment is expiring, secure the necessary consents from the tax exempt organization on Form 872.

  3. Chapter 41 and Chapter 42 Excise Taxes — Acts (or failures to act) that are subject to excise taxes under Chapter 41 and Chapter 42 are reported by the tax-exempt organization (or Section 4947(a) trust), and by the managers, self-dealers, disqualified persons, donors, donor advisors, and related persons, on Form 4720, Return of Certain Excise Taxes under Chapters 41 and 42 of the Internal Revenue Code. The period of limitations on assessment of Chapter 41 and Chapter 42 excise taxes against the tax-exempt organization (or section 4947(a) trust), and the managers, self-dealers and other applicable persons, generally begins when the tax-exempt organization (or section 4947(a) trust) files the information return Form 990-PF, Form 990, Form 990-EZ or Form 5227) for the period when the act (or failure to act) occurred, or when such information return is due, whichever is later. IRC 6501(l). If the period of limitations on assessment is expiring, secure the necessary consents on Form 872 from each of the tax-exempt organizations (or section 4947(a) trust), and the managers, self-dealers and other application persons.

  4. See IRM 7.27.30.11 for more details and instructions regarding the completion of Form 872.

8.21.3.1.3.11  (04-20-2012)
Multiple-Year Consents

  1. When multiple years exist and all are extended to the same date, use one consent Form 872 or Form 872-A, executed in duplicate. If the extension is restricted to one or more issues, use a multiple-year consent only when the same restriction applies to all tax years. Form 872-I andForm 872-IA are obsolete with the October 2009 revision of Form 872 and Form 872-A .

  2. Securely attach the original executed consent to the return of the latest year involved. Attach a copy of the executed consent to the returns for each of the other years covered by the consent.

8.21.3.1.3.12  (04-20-2012)
Parent-Subsidiary Corporation Consents (Non-Consolidated)

  1. Use one Form 872, Form 872-A , Form 872-B , or Form SS-10 to obtain a consent for a parent corporation and all of its subsidiaries. Form 872-I and Form 872-IA are obsolete with the October 2009 revision of Form 872 and Form 872-A. For additional information on the preparation of these type consents, see IRM 25.6.22 for additional guidance on the preparation of consents in Parent-Subsidiary Corporate settings.

  2. Securely attach the original executed consent to the parent corporation’s latest return and copies of the executed consent to each additional return of the parent and to the returns of the subsidiary corporations.

  3. Rather than attaching copies of the executed consent to each additional return of the parent and the returns of the subsidiary corporations, you can attach a statement to each one showing the following:

    1. name

    2. address

    3. identification number of the parent corporation

    4. the office in which the return of the parent corporation was filed

    5. the year, years or periods involved

    6. period of extension agreed to in the consent

8.21.3.1.3.13  (04-20-2012)
Consolidated Returns

  1. For consolidated income tax returns, one consent suffices to cover all companies included in the consolidated income tax return.

  2. Generally the parent (or substitute agent), acting as agent for the group, executes Form 872 or Form 872-A covering Chapter 1 Income Taxes. This authority of the parent (or substitute agent) does not extend to taxes outside Chapter 1 Income Taxes such as excise taxes, employment taxes, or withholding taxes on foreign parties (IRC 1441 and IRC 1442; Treas. Reg. section 1.1502-77(a)(3)(ii)). Form 872-I and Form 872-IA are obsolete with the October 2009 revision of Form 872 and Form 872-A.

  3. When the consolidated return case involves multiple tax years, one consent can be obtained but only if the parent and subsidiary corporations involved are identical in all years. See IRM 25.6.22 for additional guidance on preparation of consents in consolidated settings.

8.21.3.1.3.14  (08-14-2007)
Dissolved Corporation Consents

  1. Generally, approval from Area Counsel must be obtained before securing consents from the dissolved corporation. See IRM 25.6.22 for detailed information concerning this issue.

8.21.3.1.3.15  (08-14-2007)
Consents for Non-fraudulent Delinquent Returns in Willful Failure to File Cases

  1. The period of limitations on civil liability starts from the date of delinquent filing in a case involving willful failure to file provided the delinquent return is non-fraudulent. This applies even if circumstances surrounding initial non-filing are sufficient to support the fraud penalty.

  2. If the period of limitations is about to expire and criminal prosecution is pending, do not take action to secure consents without the concurrence of Counsel. See IRM 8.7, Technical and Procedural Guidelines.

8.21.3.1.3.16  (04-20-2012)
Consent Restricted to Certain Issues

  1. IRM 25.6.22.8 provides details concerning restricted consents, including the taxpayers rights, issues not subject to restrictions, restrictive statements, etc.

  2. When a restricted consent is secured on a case, all future consents for that case must contain the same restrictions.

8.21.3.1.3.17  (04-20-2012)
Form 872-A, Special Consent to Extend the Time to Assess Tax

  1. See IRM 25.6.22.7 for details concerning Special Consents Form 872-A and Form 872-IA and the procedures to follow when there is a termination of the Special Consent. Form 872-IA is obsolete with the October 2009 revision of Form 872 and Form 872-A.

  2. A Form 872-T sent by Appeals may only be signed by the Operating Unit Director or his/her delegate, Appeals Team Manager or Appeals Team Case Leader.

  3. In the Letter 968, Letter Transmitting Executed Copy of Consent to Taxpayer, inform the taxpayer that a Form 872-T used to terminate Form 872-A, may be requested from the ATE.

  4. Form 872 is accepted in place of Form 872-A if the taxpayer prefers Form 872. Form 872-A is requested only at the time Form 872 is normally requested and may be used as a renewal consent if Form 872 was previously executed. Cases involving Form 872-A receive the same priority of attention and expeditious consideration as those involving Form 872.

  5. Termination of Form 872-A by the taxpayer is rare. For special rules concerning the termination of a special consent on an accumulated earnings tax case or a personal holding company tax case, see IRM 25.6.22.7.

  6. For Joint Committee cases involving Form 872-A, see IRM 8.7.9, Joint Committee Cases.

8.21.3.1.3.18  (04-20-2012)
Consents For Employment Tax Cases

  1. Use Form SS-10, Consent to Extend the Time to Assess Employment Cases, to extend the period for assessment of taxes imposed by the Federal Insurance Contributions Act including FICA tax on tip income (with exceptions - see IRM 25.6.22.6.10.2), Federal Unemployment Tax Act, the Railroad Retirement Tax Act, and Code provisions relating to withholding of income tax on wages at the source.

  2. See IRM 25.6.22.6.10 for information concerning consents on employment tax cases, including employee share of FICA, FICA on tips and trust fund recovery penalty cases.

8.21.3.1.3.19  (04-20-2012)
Consents in Civil Fraud and/or IRC Section 6501(e) Cases

  1. The general instructions for consents (see above) also apply to cases where the civil fraud penalty is asserted, i.e., the ATE generally requests the taxpayer to execute a consent prior to the expiration of the three year period under IRC 6501(a) or the six year period under IRC 6501(e), if applicable. If the civil fraud penalty is not asserted and the case is solely open under IRC 6501(e), the ATE also considers obtaining a consent prior to the expiration of the six year period.

  2. Language restricting the consent may be added to the consent form. For example, "This consent is subject to the applicability of IRC section 6501(e)" .

  3. See IRM 25.6.22.6.17, Special Situations, for additional information on consents involving civil fraud cases and cases involving the 25% omission of income provisions of IRC 6501(e).

8.21.3.1.3.20  (04-20-2012)
Notifying Taxpayer of Change of IRS Address for Termination of Special Consents

  1. Open-ended consents provide an address that the taxpayer must use when mailing or hand carrying a notice of termination of consent. The following table lists open-ended consent forms and their corresponding termination of open-ended consent forms:

    Open-ended Consent Forms Termination of Open-ended Consent Forms
    Form 872-A Form 872-T
    Form 872-IA Form 872-T
    Form 872-O Form 872-N
    Form 872-R Form 872-Q

    Note:

    Form 872-IA is obsolete with the October 2009 revision of Form 872-A.

  2. Each open-ended consent also tells the taxpayer the address shown on the consent form can be superseded by the address shown on a Form 872-U , Change of Address to Submit Notice of Termination of Special Consent to Extend the Time to Assess Tax, or Form 872-COA , which has been replaced by Form 872-U. Use Form 872-U to notify taxpayers who previously executed an open-ended special consent when one of the following situations occurs:

    1. Their case is received from Compliance.

    2. Their case is transferred to an ATE who is working at a location other than the one shown on the consent form.

    3. There is a change in the location or mailing address of the Appeals office working the case.

  3. The following identifies who sends Form 872-U to the taxpayer and provides notice of change in IRS address.

    1. Cases coming to Appeals from Compliance with an open-ended consent: If the consent refers to the Form 872-COA or Form 872-U, the ATE assigned to the case sends the taxpayer the Form 872-U.

    2. Change in ATE location: The receiving ATE sends the Form 872-U to notify the taxpayer that the notification address has been changed.

    3. Change in office address: The ATE assigned to the case sends out the Form 872-U.

    Note:

    Generally, APS runs a statute report showing all the cases in that office that are extended by one of the open-ended consent forms listed in IRM 8.21.3.1.3.20 (1).

  4. Refer to IRM 25.6.22.7 for additional guidance on open-ended consents.

8.21.3.1.3.21  (04-20-2012)
Consents in Flow Through Entity Cases

  1. See IRM 8.21.6, Statute Information on TEFRA Cases.

8.21.3.1.3.22  (12-24-2013)
Excise Statute of Limitation on Paid Claims Assessed under IRC 6206

  1. The statute of limitations cannot be extended to make an assessment on excessive claims under IRC 6206 for claims filed under IRC 6416(a)(4), IRC 6420, IRC 6421, and IRC 6427. Refer to IRM 8.7.10 for additional guidance on Excise Tax Cases.

  2. The time period for making assessments of tax under IRC IRC 6206 may not be extended.

  3. Appeals will accept un-assessed cases with at least 270 days remaining on the statue for Appeals consideration.

  4. Cases with less than 270 days remaining on the statute will be returned to Compliance for assessment.

8.21.3.1.4  (04-20-2012)
Statutory Notices

  1. ATEs are responsible for ensuring that the statutory notice of deficiency (SND) issued by Appeals, as well as the Final Partnership Administrative Adjustment (FPAA) on TEFRA key cases, is timely prepared and issued. The decision to issue an SND must be approved by the ATM.

  2. To ensure the statute is protected, a case must have at least 90 days remaining on the statute before it is submitted for preparation of an SND.

  3. If an SND is returned undeliverable, APS notifies the ATE assigned to the case. The ATE immediately reviews the file to ensure that the proper address was used in the notice.

  4. If the last known address was used in the notice, the ATE initials, dates and immediately returns the notice to APS, and no further action is needed.

  5. If the last known address was not used in the notice and the ATE determines that the notice must be re-mailed or re-issued, the ATE will advise APS of the actions to take.

  6. When an SND is forwarded to Counsel for review, statute control responsibility remains with the ATE assigned the case even though Counsel has the case in its possession and was advised of the short statute.

8.21.3.1.5  (04-20-2012)
Physical Inventory Validation

  1. On an annual basis, all ATEs and their ATMs conduct a physical inventory and statute verification of all returns in their inventory by comparing an inventory listing generated from ACDS against their actual inventory. Annotations are made to the listing and any changes that the ATE is not able to make are returned to APS for update of ACDS. See IRM 8.10.3.

8.21.3.1.6  (04-20-2012)
Jeopardy and Termination Assessments

  1. ATEs ensure that the procedural dates concerning jeopardy and termination assessments are met, as provided in IRM 8.7.1.6.

8.21.3.1.7  (06-11-2012)
Closings

  1. The ATE must ensure there are at least 120 days remaining on the statute when a case is submitted to the ATM for review and closing. See IRM 8.21.3.1.3.2 for special rules concerning Estate Tax cases where settlement discussions break down after ATM permission is granted to keep the case open beyond the 120 day date.

  2. Written permission from the ATM is required to keep a case beyond the 120-day guideline. Granting permission does not address the performance aspects of the employee's Critical Elements.


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