8.22.9  Closing and Post Closing Actions

Manual Transmittal

November 13, 2013

Purpose

(1) This transmits revised IRM 8.22.9, Closing and Post Closing Actions.

Material Changes

(1) Please see the table below for a summary of changes:

Current IRM Description of Changes Prior IRM
IRM 8.22.9.3, Disposing of Credit Reports The hearing officer is responsible for destroying credit reports at closing. This syncs up the responsibility for destroying credit reports in paper files and electronic files closed by remote offices.  
IRM 8.22.9.4, Closing a CDP with a related WUNO Introductory subsection added to confirm that any time a separate WUNO is established for a non-precluded liability issue in CDP, both WUNOs are closed together to the same APS location. New
IRM 8.22.9.4.1, Closing a CDP with Interest Abatement none 8.22.9.4
IRM 8.22.9.4.2, Closing a CDP with Innocent Spouse none 8.22.5
IRM 8.22.9.4.3, Closing a CDP with Offer in Compromise Added an imminent TIPRA statute as a reason the CDP and OIC files might be closed separately. 8.22.6
IRM 8.22.9.4.3.2, Withdrawal Added a table to better illustrate how to determine the TC 482 date for APS when a taxpayer withdraws an OIC 8.22.6.2
IRM 8.22.9.4.3.4 Acceptance-Counsel Review Required
  • Removed instruction for ATM to remove and destroy credit reports as per updated IRM 8.22.9.3, Disposing of Credit Reports

  • Corrected instruction to say "public Inspection File consists of a redacted copy of Form 7249 attached to redacted copies of TDS or MFTRAX transcripts"

 
IRM 8.22.9.5, CDP Closing Letters none 8.22.9.7
IRM 8.22.9.5.1, Mailing Requirements for Closing Letters Removed letters that are not required by statute to be mailed separately:
  • Letter 4381-Disregarded Hearing

  • Letter 4382-Closing Letter for Form 12257

  • Letter 4383-Withdrawal Acknowledgement

8.22.9.7.1
IRM 8.22.9.5.2, Letter 4381 Disregarded Hearing Request none 8.22.9.7.2
IRM 8.22.9.5.3, Letter 4382 Waiver Closing Added IBTF-Express as a case resolution to the list of case resolutions that AOs, SOs or AARS may sign Form 12257 and also Letter 4382. 8.22.9.7.3
IRM 8.22.9.5.4, Letter 4383 Withdrawal Acknowledgement none 8.22.9.7.4
IRM 8.22.9.5.5, EH Decision Letter
  • Incorporated IRM 8.22.9.7.6, Decision Letter Summary Statement

  • Added new Letter 5145 for agreed EH decisions

  • Changed the (2) (a) Example language to: "The issuance of the Notice of Intent to Levy was proper. The levy action proposed by the Revenue Officer is sustained."

8.22.9.7.5
IRM 8.22.9.5.6, CDP Determination Letter Incorporated IRM 8.22.9.7.8, Determination Letter Summary Statement 8.22.9.7.7
IRM 8.22.9.6, Attachment to Determination and Decision Letters none 8.22.9.8
IRM 8.22.9.6.1, Tax and Periods Considered none 8.22.9.8.1
IRM 8.22.9.6.2, Summary and Recommendation none 8.22.9.8.2
IRM 8.22.9.6.3, Brief Background none 8.22.9.8.3
8.22.9.6.4, Big Three Review none 8.22.9.8.4
IRM 8.22.9.6.5, Verify the Requirements of Any Applicable Law or Administrative Procedure To para (6) (C) CDP Notice Properly Issued, added a NOTE: Return receipt requested is not required for CDP lien notices. 8.22.9.8.5
IRM 8.22.9.6.6, Issues Raised Removed the words "general authority" from:
  • the table at (1), Liability Challenges section, bullet 3.

  • (4)

8.22.9.8.6
IRM 8.22.9.6.7, Balancing none 8.22.9.8.7
IRM 8.22.9.7, Abbreviated Attachment Removed references to using the abbreviated attachment for agreed EH cases as Letter 5145 will be used for these 8.22.9.9
IRM 8.22.9.8, Closing Codes for CDP, EH, and RJ Hearings none 8.22.9.10
IRM 8.22.9.9, IRC 6702(b) Penalty-Failure to Withdraw Frivolous or Delaying Position none 8.22.9.11
IRM 8.22.9.10, Information Received after Determination or Decision Issued none 8.22.9.13
IRM 8.22.9.11, Taxpayer Contact after Determination or Decision Issued none 8.22.9.14
IRM 8.22.9.12, Post-Closing Problems none 8.22.9.16
IRM 8.22.9.13, Amending or Revising a Notice of Determination none 8.22.9.15
IRM 8.22.9.14, Collection Disagrees with Appeals Resolution Edited to emphasize:
  • Disagreement is not expressed until the case is closed out of Appeals and returned to Collection

  • Appeals determination cannot be overturned

8.22.9.17
IRM 8.22.9.15, Tax Court Review Created a Tax Court Review subsection to centralize content on the Tax Court. New
IRM 8.22.9.15.1, Deadline to Petition Tax Court Added note that special extensions may be available for members of the Armed Forces serving in a combat zone/contingency. See IRC 7508(a). 8.22.9.12
IRM 8.22.9.15.2, Standard and Scope of Review none 8.22.9.18
IRM 8.22.9.16, Remand Added:
  • Provided examples of "new issues" that might be considered by Compliance.

  • Content on Changed Circumstances remands.

8.22.9.19
IRM 8.22.9.16.1, Receipt of Remand and Supplemental Hearing
  • Remands worked as a priority based on court imposed deadline.

  • ATM must input **RR to reflect the case is returned to the assigned hearing officer.

8.22.9.19.1
IRM 8.22.9.16.2, Consideration of a New OIC none 8.22.9.19.2
IRM 8.22.9.16.3,Reconsideration of an Existing OIC none 8.22.9.19.3
IRM 8.22.9.16.4, Closing of Remand Hearing officer must input AC/FR and the ATM input a revised ACAPDATE on the CAR to close out the remand. 8.22.9.19.4
IRM 8.22.9.17, Retained Jurisdiction (RJ) Hearings none 8.22.9.20
Exhibit 8.22.9-1, Instructions for Completing Customized Form 5402 Expanded guidance for the Remarks section for short CSED situations.  
Throughout
  • Editorial changes made throughout including grammar, spelling, and minor clarification.

  • Plain language changes.

 

Effect on Other Documents

IRM 8.22.9 dated September 21, 2012 is superseded.

Audience

Settlement officers, appeals officers, appeals account resolution specialists and appeals team managers

Effective Date

(11-13-2013)

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

8.22.9.1  (03-29-2012)
Overview

  1. This section provides guidance to hearing officers for closing and post-closing actions in Collection Due Process (CDP), Equivalent Hearing (EH) and retained jurisdiction (RJ) cases.

  2. The Appeals Team Manager (ATM) has approval authority for all CDP closures except:

    • Son of Boss (SOB) liabilities

    • Offer in Compromises (OIC) that require a higher level of approval under Delegation Order 5-1

  3. Not every closing issue is discussed in this section. The instructions for some issues fit better in other sections. The table below reflects the IRM location of instructions for closing issues not covered in this section.

    Closing Issue IRM Location
    Manually-Monitored Installment Agreements IRM 8.22.7.5.2
    Currently Not Collectible IRM 8.22.7.7
    OIC Is Not Processable IRM 8.22.7.10.5.1
    COIC Recommends Acceptance of OIC IRM 8.22.7.10.6.4
    Mandatory OIC Withdrawal Procedures for Missed Periodic Payment IRM 8.22.7.10.7
    OIC Return Procedures for Dishonored Payments IRM 8.22.7.10.8
    OIC Return Procedures for Bankruptcy IRM 8.22.7.10.9
    OIC Return Procedures for Death of a Taxpayer IRM 8.22.7.10.10
    Withdrawing a CDP When an OIC is Pending IRM 8.22.7.10.11
    EITC-when EITC is precluded from CDP IRM 8.22.8.11
    Reasonable Cause Penalty Abatement -when PENAP is precluded from CDP IRM 8.22.8.13
    SOB-Approval of Case Decisions IRM 8.22.8.21.4
    ID Theft with Tax Consequences is Confirmed IRM 8.6.5

8.22.9.2  (03-29-2012)
Administrative Record

  1. Your decision in a timely CDP may be subject to Tax Court review. When a taxpayer petitions Tax Court, the Court reviews the administrative record that you compiled in making your determination. If the administrative record is incomplete, the CDP may be remanded for your reconsideration.

  2. At closing, your administrative record should include:

    • CDP lien/levy notice

    • CDP hearing request

    • IDRS transcripts of the taxpayer's account you reviewed

    • ICS or AMS history if provided

    • Correspondence between you and the taxpayer/representative

    • Case activity record

    • All documents submitted by the taxpayer/representative from the date of the hearing request until the date of the determination/decision letter.

    • Form 14041, Waiver of Right to Request New Settlement Officer, if applicable

    • Tape recordings if the taxpayer recorded the hearing

8.22.9.3  (11-13-2013)
Disposing of Credit Reports

  1. When closing a CDP case with a credit report:

    1. Summarize your review of the report in the case activity record, and

    2. Remove and destroy the credit report prior to submitting the case for closure.

  2. The disposition of credit reports by IRS personnel is monitored under The Fair Credit Reporting Act, 15 U.S.C. 1681.

8.22.9.4  (11-13-2013)
Closing a CDP with a Related WUNO

  1. When a separate Work Unit Number (WUNO) is established for a non-precluded liability issue in CDP, both WUNOs must be closed together to the same Account and Processing Support (APS) location unless one is withdrawn. APS holds the case files together until the suspense periods expires or the matter is resolved in Tax Court.

  2. The related WUNO may be an interest abatement, innocent spouse, offer-in-compromise or other CDP-related liability issue.

8.22.9.4.1  (11-13-2013)
Closing a CDP with Interest Abatement

  1. CDP and interest abatement WUNOs must have separate administrative files due to different closing actions required for each. These files must be closed together unless one is withdrawn.

  2. At the conclusion of the CDP hearing, issue one of the combination letters in the table below. The combination letter must be used as it provides the taxpayer with an extended period to petition Tax Court on the interest abatement issue.

    If... Then issue...
    Timely CDP Letter 4389 - Notice of Determination Concerning Collection Action(s) Under IRC 6320 and/or IRC 6330 and Abatement of Interest Under IRC 6404
    EH Letter 4440 - Decision Letter Concerning Equivalent Hearing Under Section 6320 and/or 6330 of the Internal Revenue Code and Abatement of Interest Under Section 6404

8.22.9.4.2  (11-13-2013)
Closing a CDP with Innocent Spouse

  1. CDP and Innocent Spouse (IS) WUNOs must have separate administrative files due to different closing actions required for each. These files must be closed together unless one is withdrawn.

  2. When a joint CDP request includes IS as an issue, each taxpayer receives a different closing letter because:

    • The requesting spouse (RS) has 90 days to petition Tax Court regarding the IS determination

    • Each spouse, RS and non-requesting spouse (NRS), has 30 days to petition regarding the CDP determination.

  3. For joint CDP requests, the CDP attachment can be the same for both taxpayers as Appeals is making one determination/decision.

  4. The table below describes the closing letters in a CDP case where the NRS was a participant in the CDP hearing. Letter 3289, Final Appeals Notice, is not issued when the NRS is advised of the result of the IS decision in the CDP closing letter.

    If... And... Issue to RS... Issue to NRS...
    Timely CDP Taxpayer(s) sign Form 12257 and RS signs Form 870IS-Waiver Letter 4382, Closing Letter F12257, acknowledging the receipt of both the CDP and IS waivers Letter 4382
    Taxpayer(s) sign Form 12257 but RS does not sign Form 870IS
    • Letter 4382

    • Letter 3288, Final Appeals Determination

    Letter 4382
    Taxpayer(s) do not sign Form 12257 but RS signs Form 870IS Letter 3193, Notice of Determination Letter 3193
    Taxpayer(s) do not sign Form 12257 and RS does not sign Form 870IS. Letter 4390, Combo Notice of Determination Letter 3193
    EH RS signs Form 870IS Letter 3210, Decision Letter 3210
    RS does not sign Form 870IS Letter 4439, ComboDecision Letter Letter 3210

  5. When the NRS was not a participant in the CDP hearing, issue the NRS Letter 3289 at closing.

  6. Input the final action codes to both WUNOs. Your ATM inputs the ACAP to both WUNOs.

8.22.9.4.3  (11-13-2013)
Closing a CDP with Offer in Compromise

  1. CDP and the OIC WUNOs must have separate administrative files due to different closing actions required for each. The CDP and OIC files must be closed together unless one was withdrawn, the OIC is not processable or there is an imminent TIPRA statute.

  2. If you are recommending acceptance of an OIC that requires Counsel review, hold the CDP open until approval is secured so the two files can be closed together.

8.22.9.4.3.1  (11-13-2013)
Rejection

  1. When a CDP OIC is rejected, the OIC file must contain:

    • Form 5402 prepared in APGolf

    • Appeals Case Memorandum (ACM)

    • Form 3040 or other written authorization, if applicable

      Note:

      Do not prepare a Form 1271, Rejection or Withdrawal Memorandum as this is used by other functions to convey their decision to Appeals.

  2. The decision to reject the offer is conveyed in the attachment to the determination/decision letter or other closing letter. The attachment must state that the OIC was rejected and the reason for the rejection including a discussion of Reasonable Collection Potential (RCP) when RCP is the basis of the rejection. Rejection Letter 238 is not used.

  3. Once the above documents are complete and assembled, update ACDS case status to 'AC/FR' and submit the CDP and OIC case files together to your ATM for approval.

  4. A taxpayer is not entitled to an administrative appeal under the Appeals OIC program if the taxpayer submits an offer to Appeals and Appeals rejects the offer. The independent administrative review requirement of IRC 7122(e), Administrative review, of the proposed rejection is satisfied by review by the ATM.

8.22.9.4.3.2  (11-13-2013)
Withdrawal

  1. When a CDP OIC is being withdrawn, the file must contain:

    • Form 5402

    • ACM if more details are needed than can fit on Form 5402

    • Form 3040 or other written authorization, if applicable

  2. The withdrawal of the OIC must be discussed in your CDP closing letter or the attachment to the closing letter in order to close the offer and the TIPRA statute.

    Note:

    Letter 241,Offer in Compromise Withdrawal, may be used to communicate the withdrawal when you are using Letter 4383 to close the CDP.

  3. Once the above documents are complete and assembled, update ACDS case status to 'AC/FR' and submit the CDP and OIC case files together to your ATM for approval.

  4. The date an offer is considered withdrawn depends on how the taxpayer transmits the withdrawal. On Form 5402, advise APS to input a TC 482 with a date based on the table below:

    If an OIC was withdrawn by... Then...
    • regular mail, or

    • fax

    Tell APS the TC 482 date is the date of the CDP closing letter.
    • certified mail, or

    • hand delivery

    Tell APS the TC 482 date is the date you received the certified or hand delivered withdrawal (specify).

8.22.9.4.3.3  (11-13-2013)
Acceptance-Counsel Review Not Required

  1. When a CDP OIC is being accepted and counsel review is not required, the file must contain:

    • Form 656 and if applicable, Amended Form 656

    • An unredacted Form 7249 , Offer Acceptance Report

    • A Public Inspection File consisting of a redacted copy of Form 7249 attached to redacted copies of TDS or MFTRAX transcripts

    • Form 5402

    • ACM with details not included in Letter 3193 or Letter 3210 attachment

    • Financial information, including Form 433-A (OIC) and/or Form 433-B (OIC), and verification information used to make the acceptability determination

    • OIC acceptance Letter with a copy of the Form 656 and any collateral agreements

  2. When recommending acceptance of two or more related offers based on a single financial analysis, only one OIC ACM is necessary. To ensure proper processing of the related offers, create separate files marked “1 of 2,” and “2 of 2.” The separate files should contain the documents listed above except for the single consolidated ACM.

  3. Once the above documents are complete and assembled, submit the CDP and OIC case files to your ATM for approval.

8.22.9.4.3.4  (11-13-2013)
Acceptance-Counsel Review Required

  1. IRC 7122(b) requires an opinion from Counsel if a liability is $50,000 or more including tax, penalties and interest. The requirement is generally based on the liability at the time of submission, not at the time of acceptance. See IRM 8.23.4.2.2, Counsel Review of Acceptance Recommendations.

  2. When a CDP OIC is recommended for acceptance and counsel review is required, the file must contain:

    • Form 656 and if applicable, Amended Form 656

    • Form 7249, Offer Acceptance Report

    • A Public Inspection File consisting of an redacted copy of Form 7249 attached to redacted copies of TDS or MFTRAX transcripts

    • Form 5402

    • ACM with details not included in Letter 3193 or Letter 3210 attachment

    • Financial information, including Form 433-A (OIC) and/or Form 433-B (OIC), verification information used to make the acceptability determination

    • OIC acceptance Letter with a copy of the Form 656 and any collateral agreements

  3. Local procedures dictate how to route an OIC file to Counsel for their review. As such, the following guidance is general in nature. Each office must establish processes within the following framework to effectively manage and control the flow of the case and input of the required data at the appropriate time.

    Step Action
    1 Input Action Code 'AC' with SubAction 'DC' in ACDS and submit the OIC to your ATM for approval. Do not input 'AC/FR' yet because resolution is subject to Counsel's review.
    2 ATM signs Form 7249 to approve the recommendation or returns the OIC if the recommendation is not approved.
    3 If ATM routes the case to Counsel through APS, ensure ACDS is updated with "DCOTHER" , and forward the file with Form 3210.
    4 After the OIC returns with Counsel's review, input 'AC/FR' and submit to your ATM for final approval with the CDP file.
    5 ATM signs the Acceptance Letter, inputs the ACAPDATE on ACDS, removes and destroys all credit reports and forwards the file to APS for closing.
    6 If the approving official is the Area Director or the Director of Field Operations, forward the file for approval. Once the signed Form 7249 and Acceptance Letter are received from the approving official, submit to your ATM for final approval with the CDP file. The ATM inputs the ACAPDATE and forwards the file to APS for closing.

  4. If an offer is ultimately rejected due to an unfavorable review by Counsel, enter an explanation in the history as to why Counsel declined to sign and why the offer was ultimately rejected.

8.22.9.5  (11-13-2013)
CDP Closing Letters

  1. A closing letter is prepared for every CDP/ EH with the exception of withdrawn CDPs that did not receive an Appeals acknowledgment letter. The closing letters used are discussed below.

8.22.9.5.1  (11-13-2013)
Mailing Requirements for Closing Letters

  1. Any notice required to be sent by statute is sent separately to each individual filing a joint return. The following closing letters are sent separately to each individual requesting a hearing on a joint return:

    • Notice of Determination

    • Decision Letter

    • Letter 3978 Supplemental Notice of Determination

  2. Closing letters not required by statute are sent separately to each spouse if one is living at a different address. Examples include:

    • Letter 4381

    • Letter 4382

    • Letter 4383

    • Letter 5145

  3. Print an ENMOD or INOLES at closing to ensure the closing letter is mailed to the taxpayer's most current address.

8.22.9.5.2  (11-13-2013)
Letter 4381 Disregarded Hearing Request

  1. Appeals may disregard any portion or all of the CDP or EH hearing request when a portion or all the request states a position which the Service has publicly identified as frivolous or reflects a desire to delay or impede the administration of the federal tax laws.

  2. If a taxpayer failed to respond within 30 days or responded with frivolous or desire-to-delay statements after receiving Letter 4380, Frivolous Acknowledgement, Letter 4381, Disregard Frivolous, is used to advise the taxpayer the hearing request has been disregarded.

  3. An attachment is not prepared for Letter 4381 since Appeals did not conduct a legal and administrative analysis.

8.22.9.5.3  (11-13-2013)
Letter 4382 Waiver Acknowledgement

  1. When you reach an agreed resolution and the taxpayer signs Form 12257, Summary Notice of Determination, prepare Letter 4382 as a cover letter. This letter acknowledges receipt of Form 12257 and the agreed resolution of the CDP.

  2. Document the agreement reached on either Form 12257 or Letter 4382 including the terms of the agreed resolution:

    • IA: payment amount and date

    • OIC: terms of the accepted offer

    • CNC: accrual of interest and penalty

    • Innocent Spouse: the final determination

  3. If you considered an OIC prior to reaching agreement on an IA or CNC, youmust state whether the offer was rejected, returned or withdrawn in order to end the TIPRA statute.

  4. Letter 4382 is signed by the ATM with two exceptions. Delegation Order App-193-1 allows Appeals Officers, Settlement Officers or Account Resolution Specialists to sign Form 12257 and Letter 4382 when either:

    • IS is the sole issue and relief is granted in full leaving no remaining issue for Appeals consideration

    • Collection is the sole issue, which is resolved by a IBTF-Express, Streamlined or Guaranteed IA

  5. The hearing officer signing the Form 12257 and Letter 4382:

    1. Emails the case resolution to the ATM so the ATM can enter the ACAP date on ACDS

    2. Enters "N/A- D.O. App-193-1" in the Form 5402 signature block

    3. Sends the closed case to APS for processing

8.22.9.5.4  (11-13-2013)
Letter 4383 Withdrawal Acknowledgement

  1. Prepare Letter 4383 when a taxpayer withdraws a CDP request and Appeals sent the Uniform Acknowledgement Letter or combination UAL-Substantive Contact Letter. Letter 4383:

    • Provides the taxpayer the date Appeals received the withdrawal

    • Provides APS the date Appeals received the withdrawal and this date is used for input of the TC 521 cc 76/77

    • Can be signed by the hearing officer

  2. Do not send Letter 4383 if the withdrawal was received before Appeals acknowledged receipt of the case with either the UAL or combination UAL-SCL.

  3. In a withdrawal, there is no need to:

    • Prepare an ACM

    • Secure an ATM signature on Form 5402

  4. Use the following codes on the Form 5402:

    • Closing Code = 16

    • CDP Tracking Code = WD

    • Resolution Reason Code = OT

8.22.9.5.5  (11-13-2013)
EH Decision Letter

  1. At the conclusion of an EH hearing, prepare one of the following decision letters in APGolf:

    • Letter 3210 in most instances or

    • Combination Letter 4439 where IS was raised or

    • Combination Letter 4440 where Abatement of Interest was raised or

    • Letter 4300 where the case was resolved in Bankruptcy Court

    • Letter 5145 for agreed EH decisions

  2. Decision Letters contain a Summary Statement at the bottom of the letter which:

    1. Briefly states whether the disputed collection action is sustained or not

      Example:

      "The issuance of the Notice of Intent to Levy was proper. The levy action proposed by the Revenue Officer is sustained"

    2. Describes any conditions that might result in future enforced collection action

      Example:

      "Your request for an installment agreement is granted. Failure to meet the terms of the agreement may result in collection action."

  3. If a CDP liability is paid and the taxpayer doesn't withdraw the request, you still must issue a decision Letter.

8.22.9.5.6  (11-13-2013)
CDP Determination Letter

  1. At the conclusion of a CDP hearing, prepare one of the following determination letters in APGolf:

    • Letter 3193 in most instances or

    • Combination Letter 4389 where Abatement of Interest was raised or

    • Combination Letter 4390 where IS was raised or

    • Letter 4382 where the taxpayer signed Form 12257 or

    • Letter 4299 where the case was resolved in Bankruptcy Court

  2. Determination Letters contain a Summary Statement at the bottom of the letter which:

    1. Briefly states whether the disputed collection action is sustained or not

      Example:

      "The filing of the Notice of Federal Tax Lien was appropriate. The lien will remain in place until the liability is satisfied or the collection statute of limitation expires"

    2. Describes any conditions that might result in future enforced collection action

      Example:

      "Your request for an installment agreement is granted. Failure to meet the terms of the attached agreement may result in collection action."

  3. If a CDP liability is paid and the taxpayer doesn't withdraw their request, you still must issue a determination letter.

8.22.9.6  (11-13-2013)
Attachment to Determination and Decision Letters

  1. Determination and decision letters are issued with an attachment, which provides the taxpayer a substantive discussion of the CDP hearing. Avoid referencing computer codes by their number or description (i.e. TC 520, TXMOD) and using acronyms that the taxpayer won't be familiar with.

  2. In an abuse of discretion review, the Tax Court relies on your attachment to decide if the determination was arbitrary, capricious, or without sound basis in fact or law.

  3. The attachment document is prepared in APGolf by selecting "attachment" from the CDP pick list. Use of the Attachment Template in APGolf is highly recommended as it prompts you to document the required verification items listed below.

8.22.9.6.1  (11-13-2013)
Tax and Periods Considered

  1. At the start of the attachment, list the type of tax, period(s), date of the CDP notice(s), and date of taxpayer's CDP request. Only list periods that appeared in the CDP notice(s).

  2. State whether you conducted a levy or lien hearing, or a combination of both.

  3. If the request was based on both lien and levy notices, specify tax and periods listed in each notice.

  4. If the tax includes civil penalty module(s), specify the code section under which the penalty was imposed.

8.22.9.6.2  (11-13-2013)
Summary and Recommendation

  1. This section briefly summarizes what the reader will find in the rest of the document. Clearly state what your determination was regarding the hearing.

8.22.9.6.3  (11-13-2013)
Brief Background

  1. The brief background section of the attachment describes:

    • Requests for documentation

    • How much time you gave the taxpayer to produce the documents requested and whether the documents were provided

    • That a face-to-face conference was offered (if one was offered) and if the taxpayer agreed to a telephone or correspondence hearing in lieu of a face-to-face meeting

    • Any issues regarding timeliness of the CDP request. If timeliness was disputed by the taxpayer, discuss this further in "Issues" section

8.22.9.6.4  (11-13-2013)
Big Three Review

  1. The hearing officer conducting the hearing is required by law to consider three areas in a CDP determination, referred to as the "Big Three." Your attachment must contain a "Big Three" review:

    1. Verify the requirements of any applicable law or administrative procedure were met

    2. Issues raised

    3. Balancing

8.22.9.6.5  (11-13-2013)
Verify the Requirements of Any Applicable Law or Administrative Procedure

  1. This section is for discussing the legal and administrative review conducted as described in IRM 8.22.5.4.2, Legal and Administrative Procedure Review. Use of the attachment template in APGolf is highly recommended as it prompts you to document the verification items bolded below:

  2. Valid Assessment: Was a valid assessment made for each tax and period on the CDP notice? Invalid assessments must be abated and collection cannot proceed. If the liability arose from a Statutory Notice of Deficiency (SNOD) or Letter 1153 10 Day Notification Letter, discuss whether the notice was properly issued as per IRM 8.22.5.4.2 . Discussion should include whether:

    • The assessment is valid because the SNOD or 1153 was timely issued by certified mail to the taxpayer’s last known address.

    • The assessment is valid because the taxpayer signed a waiver, making the SNOD or 1153 unnecessary.

    • The assessment is invalid because the SNOD or 1153 was not sent to the last known address and not received in sufficient time to petition Tax Court.

    • The assessment is invalid because the assessment was incorrectly assessed under math error procedures with no SNOD.

    • For 6020(b) nonfiler assessments, that the failure to file, failure to pay and estimated tax penalties are listed on the SNOD. If not, the penalty assessments would be invalid.

  3. Receipt of the SNOD or 1153 is not required to verify an assessment is valid. Receipt is relevant to establishing whether liability was properly at issue in the hearing. If the taxpayer admitted receipt of the notice, document it here. If the taxpayer denied or could not recall receipt of the notice, see the table below for additional documentation:

    If you... Add this language to the Valid Assessment discussion... Liability at issue?
    Can’t confirm receipt of SNOD I confirmed a valid notice of deficiency was issued and that the notice was sent to your last known address. You denied receipt of this notice and I could not confirm receipt. Yes
    Confirms receipt of SNOD I confirmed a valid notice of deficiency was issued and that the notice was sent to your last known address. You denied receipt of the notice but our records confirm that you either signed for or refused delivery of this notice. No
    Can’t confirm receipt of Letter 1153 I confirmed Letter 1153 was properly sent to your last known address prior to the assessment of the IRC 6672 Trust Fund Recovery Penalty. You denied receipt of this letter and I could not confirm receipt. Yes
    Confirms receipt of Letter 1153 I confirmed Letter 1153 was properly sent to your last known address prior to the assessment of the IRC 6672 Trust Fund Recovery Penalty. You denied receipt of this letter but our records confirm that you either signed for or refused delivery of this letter. No

  4. Notice and Demand: Was notice and demand issued to the taxpayer’s last known address within 60 days of assessment as per IRC 6303? Failure to give notice and demand within 60 days doesn’t invalidate the notice and demand or the assessment. See Treas. Reg. 301.6303-1(a). If the IRC 6303 notice was not issued or issued late, any other collection notice can constitute notice and demand for purposes of the statute.

  5. Balance Due: Was there a balance due at the time the CDP notice was issued?

  6. CDP Notice Properly Issued: CDP notice verification requires you to confirm the CDP lien or levy notice was properly issued to the taxpayer. Properly issued means the CDP notice was:

    1. Delivered personally to the taxpayer, or

    2. Left at the taxpayer's dwelling or usual place of business, or

    3. Sent by certified or registered mail, return receipt requested, to the taxpayer's last known address

      Note:

      Return receipt requested is not required for CDP lien notices

  7. No prior involvement: Did you previously handle a non-CDP case (including EH cases) on this taxpayer for the same tax and tax period? If so, document that you obtained a Form 14041 waiver. IRC 6320(b)(3) and 6330(b)(3) require the hearing to be conducted by an employee with no prior involvement with respect to the unpaid tax. Prior involvement includes participation in a matter (other than a prior CDP hearing) that the taxpayer may have had with respect to the taxes shown on the CDP notice.

    Exception:

    For cases in the 10th circuit, see IRM 8.22.5.4.1.1, No Prior Involvement - 10th Circuit Exception.

8.22.9.6.6  (11-13-2013)
Issues Raised

  1. This section is for discussing all nonfrivolous issues raised on Form 12153 and in the hearing. The table below highlights the issues a taxpayer might raise and what to discuss:

    If the issue is... Then discuss...
    Spousal defense Any spousal defense raised and why the claim was accepted or rejected.
    Challenges to appropriateness of collection action Any challenges to the appropriateness of collection action raised including:
    • Economic hardship: If the taxpayer claims levy action will result in an economic hardship, discuss why this is or isn't so. Levy action is prohibited if it would cause economic hardship even if the taxpayer has unfiled returns. If you find economic hardship, place the CDP periods in CNC hardship status. Discuss that penalties and interest continue to accrue and the account may be removed from CNC status if their financial situation improves.

    • Taxes discharged in bankruptcy: If the taxpayer claims the tax liability was discharged in bankruptcy, discuss why this is or isn't so

    Collection alternatives Any collection alternatives raised including IA, OIC, posting a bond, substitution of other asset, withholding collection action and withdrawal of an NFTL.
    • For an IA, discuss the terms of agreement and actions required. Advise the taxpayer of the consequences if the terms are not met or if there is a change in their financial situation

    • For an NFTL withdrawal request, discuss the issue using one of the four withdrawal criteria in IRC 6323(j)

    • For accepted OICs, do not record the details of the RCP as they are instead listed on a separate ACM

    • For rejected OICs, provide a detailed RCP so the taxpayer will know the reason for the rejection. Also, clearly state the OIC was rejected and the reason for the rejection.

    Liability Challenges Any liability challenge made by the taxpayer.
    • Discuss whether the taxpayer was precluded from raising liability and why

    • If liability was at issue, explain why adjustments requested by the taxpayer were accepted or rejected

    • If you considered a liability that was precluded from CDP, your attachment will only describe the adjustments to the liability. A liability precluded from CDP is not addressed in the attachment except to note that liability was addressed separately from the CDP

    • If there is no challenge to the liability, state "The taxpayer did not dispute the liability"

  2. If the taxpayer's arguments and/or collection alternatives were rejected, why were they rejected? Explain in sufficient detail why your determination was correct based on the facts before you.

  3. When an ASFR/SFR liability was raised by the taxpayer, document the following under Issues Raised or on the Form 12257:

    You filed income tax return(s) for calendar year ending [ ] with Appeals after the IRS completed substitute return(s) for you as authorized by Internal Revenue Code 6020(b). Appeals forwarded your income tax return(s) for reconsideration. The IRS processed your return(s) and made the adjustments you requested. Since there is no dispute as to the amount of the tax liability, it is not necessary for Appeals to make a determination on this issue.

  4. When an ASFR/SFR liability was raised by the taxpayer but precluded, document the following under Issues Raised or on the Form 12257:

    I determined you were precluded from challenging the liability for the [ ] tax year(s) in CDP because you received a prior opportunity to do so. Though precluded, your liability was reconsidered outside of CDP. You filed an income tax return for the [ ] tax year(s) which were forwarded for reconsideration. The IRS made the adjustments you requested.

  5. If the taxpayer raised frivolous issues, do not discuss them. Instead, note that Appeals does not consider frivolous issues.

8.22.9.6.7  (11-13-2013)
Balancing

  1. In the balancing section, explain whether the proposed collection action balances the need for efficient collection of taxes with the legitimate concern of the taxpayer that any collection action be no more intrusive than necessary. Balancing is tied to the taxpayer's:

    1. Actions or inaction

    2. Compliance history

    3. Financial circumstance

  2. Balancing must be done even if the only issue raised is liability.

    Example:

    Having confirmed the validity of the underlying liability, the IRS has little choice but to collect your tax liability as best it can until you decide to voluntarily pay. It is my judgment that the Notice of Intent to Levy balances the efficient collection of taxes with your legitimate concern that the collection action be no more intrusive than necessary.

  3. When the taxpayer is unresponsive or proposes no collection alternatives, the levy proposed or Notice of Federal Tax Lien is generally sustained.

    Example:

    You proposed no alternative to the Notice of Federal Tax Lien and you did not participate in the hearing you requested. It is my judgment that the Notice of Federal Tax Lien balances the efficient collection of taxes with your legitimate concern that the collection action be no more intrusive than necessary. When the tax liability is paid in full or expires by statute, the lien will be released.

  4. When the Notice of Intent to Levy was properly issued but you subsequently agree to a collection alternative, state so.

    Example:

    While the Notice of Intent to Levy was properly issued, you subsequently provided financial information to Appeals that confirmed levy would result in economic hardship. Appeals has agreed to put your account into Currently not Collectible status.

  5. When the Notice of Federal Tax Lien is sustained.

    Example:

    The filing of the Federal Tax Lien makes the IRS a secured creditor, which protects the Government in the event that you sell assets or file bankruptcy. You failed to demonstrate that the Notice of Federal Tax Lien was overly intrusive or that better alternatives are available. It is my judgment that the Notice of Federal Tax Lien balanced the efficient collection of taxes with your legitimate concern that the collection action be no more intrusive than necessary.

8.22.9.7  (11-13-2013)
Abbreviated Attachment

  1. When there is an agreed resolution and the taxpayer declines to sign Form 12257, use the language below as an abbreviated attachment to your determination or decision letter:

    "Appeals has verified that applicable laws and administrative procedures have been met, has considered the issues raised, and has balanced the proposed Collection action with the legitimate concerns that such action be no more intrusive than necessary as required by section 6330(c)(3). The taxpayer(s) has (have) represented to Appeals that the taxpayer(s) agrees with the proposed collection alternative described below. The proposed collection alternative balances the need for the efficient collection of taxes with the legitimate concern of the person that any collection action be no more intrusive than necessary. The determination of Appeals is: [Insert terms of the collection alternative]"

  2. If you considered and did not accept an OIC, the abbreviated attachment must state whether the offer was rejected, returned or withdrawn.

8.22.9.8  (11-13-2013)
Closing Codes for CDP, EH, and RJ Hearings

  1. CDPs are closed using one of the following closing codes:

    Closing Code Definition
    04 Agreed-Form 12257 Waiver
    05 Defaulted Determination Letter
    10 Docketed-Agreed, decision document
    11 Docketed-Dismissed, lack of jurisdiction
    12 Docketed-Dismissed, lack of prosecution
    13 Disregarded CDP or EH hearing request
    16 Withdrawn-Form 12256 or rescinded with Appeals time
    17 Tried with Appeals time
    20 Premature Referral, withdrawn or rescinded with no Appeals time
    42 case remanded
    43 petition filed

  2. EH cases are closed using one of the following closing codes:

    Closing Code Definition
    13 disregarded CDP request
    14
    • fully sustained

    • collection action is supported with no change

    15
    • partially or not sustained

    • full or partial abatement

    • minor changes or collection action is completely overturned

    16 withdrawal
    20 withdrawal with no Appeals time

  3. RJ cases are closed using one of the following closing codes:

    Closing Code Definition
    14 Whether the Collection function is following Appeals determination: Collection is following Appeals determination
    14 Change in circumstances: No change in Appeals determination
    15 Collection is not following Appeals' determination
    16 CDP determination is revised in cases involving change in circumstances

8.22.9.9  (11-13-2013)
IRC 6702(b) Penalty-Failure to Withdraw Frivolous or Delaying Position

  1. Collection is responsible for recommending assessment of the IRC 6702(b) penalty and may impose a $5,000 penalty against a taxpayer who makes a:

    • Frivolous or desire-to-delay argument in a CDP request and fails to withdraw in writing the frivolous/delay argument, or

    • Hybrid request as per IRM 8.22.5.5.3 and fails to withdraw the frivolous/desire-to-delay argument

  2. When the taxpayer fails to withdraw a frivolous or desire-to-delay position, whether in a disregarded hearing or a hybrid request, Appeals must provide certain documents to Collection so they can consider the penalty. In such an instance, direct APS to return the following documents to Collection:

    1. Form 5402: state on the Form that Appeals determined the issues raised were either a specified frivolous position or intended to delay or impede the hearing process

    2. A copy of the frivolous CDP hearing request

    3. Letter 4380 or 3846 issued to solicit a withdrawal of taxpayer's frivolous/delay arguments

      Note:

      Include a copy of Letter 3846 in addition to the Letter 4380 if the taxpayer in response to Letter 4380 provided a legitimate reason but failed to withdraw the frivolous or desire-to-delay position

    4. Case history documenting any discussion with the taxpayer regarding the withdrawal request

    5. Any written communication received from the taxpayer in response to the withdrawal request

  3. The IRC 6702(b) penalty does not apply to EH hearings.

8.22.9.10  (11-13-2013)
Information Received after Determination or Decision Issued

  1. A CDP hearing continues until the determination or decision letter is issued. If a taxpayer provides information after the determination or decision is issued, see the table below:

    If... Then...
    the case is in suspense in APS put the new information in the administrative file
    the case is closed out of Appeals forward the new information to Collection
    the case is docketed forward the new information to the assigned Area Counsel attorney

  2. Note the date you received the information in your Case Activity Record in case the taxpayer disputes timeliness to the Tax Court.

8.22.9.11  (11-13-2013)
Taxpayer Contact after Determination or Decision Issued

  1. Appeals does not meet with a taxpayer after a determination or decision letter is issued, unless there is a remand or a retained jurisdiction hearing. Instead, taxpayers are directed to Collection. The Tax Court does not consider a supplemental Notice of Determination unless it was issued as part of a Court-ordered remand.

  2. If the taxpayer alerts you to a problem with the implementation of your determination, you must respond. Most closing problems can be resolved with a closed case referral, generated in APGolf and sent by secure email to the Fresno Appeals Account Resolution Specialist (AARS) as described below.

8.22.9.12  (11-13-2013)
Post-Closing Problems

  1. When a collection alternative or adjustment is not input properly, refer the post-closing problem to AARS for correction:

    1. In APGolf, under the Miscellaneous category, select "Back End Account Resolution"

    2. Complete the referral Form and save it

    3. Send the referral form by secure email as an attachment to *AP Account Resolution

  2. AARS does not correct problems on open cases. Problems on open cases must be corrected through APS.

8.22.9.13  (11-13-2013)
Amending or Revising a Notice of Determination

  1. Chief Counsel has determined that Appeals cannot rescind a Notice of Determination (NOD) in any circumstance. Appeals may amend or revise a NOD within the 30 day period to petition Tax Court if:

    1. The NOD is clearly in error

    2. The taxpayer has not petitioned Tax Court

    3. The correction can be made within the 30 day period to petition Tax Court

    Example:

    The summary statement on the determination letter says levy action is appropriate while the attachment to the determination says the account is to be placed in CNC. The hearing officer meant to say that levy action was not appropriate because the account should be placed in CNC. The NOD is clearly in error and should be corrected if the 30 day period to petitioned Tax Court has not expired.

  2. If the time remaining within the 30 day period to petition Tax Court is not sufficient to determine if the NOD was in error, do not amend or revise the NOD.

    Example:

    The taxpayer timely submitted financial information that was not associated with the case before the NOD was mailed. It is not clear if the additional information would have changed the determination.

  3. If the error is not correctable within the 30 day period to petition Tax Court, do not amend or revise the NOD.

    Example:

    The taxpayer submitted an offer directly to COIC before the NOD was mailed and the offer was not associated with the CDP. Investigating an offer will take more than 30 days.

  4. An amended or revised NOD must contain the same date as the original NOD. The NOD should be titled "Revised" and issued by certified mail.

  5. Consult with counsel if it is not clear whether an amended or revised determination is appropriate.

8.22.9.14  (11-13-2013)
Collection Disagrees with Appeals Determination

  1. If Collection disagrees with Appeals determination in a timely or EH CDP, they may express their disagreement to local Appeals management after the case is closed out of Appeals and returned. Collection must delay such discussions until after the case is returned in order to prevent prohibited ex parte communications, preserve the independence of Appeals, and protect the integrity of the CDP process.

  2. If a resolution cannot be reached at the local level, the disagreement may be elevated.

  3. Appeals determination in a timely or EH CDP must be implemented even if Collection disagrees and the disagreement is elevated. The purpose of raising or elevating a disagreement is not to overturn Appeals determination but to ensure similar concerns do not arise in the future.

8.22.9.15  (11-13-2013)
Tax Court Review

  1. The United States Tax Court is a court of record established by Congress under Article I of the U.S. Constitution. The Tax Court’s jurisdiction in CDP includes reviewing the following determinations:

    • CDP

    • Innocent Spouse

    • Interest abatement

8.22.9.15.1  (11-13-2013)
Deadline to Petition Tax Court

  1. A Tax Court case is commenced by filing a petition. The table below lists the deadline for filing a petition with the Tax Court:

    Determination Deadline IRC
    Collection Due Process 30 days from issuance of Notice of Determination 6320/6330
    Innocent Spouse 90 days from issuance of Notice of Determination 6015(e)
    Interest Abatement 180 days from issuance of Notice of Determination 6404(h)

  2. If the taxpayer wants Tax Court review of a denial of relief under IRC 6015 or 6404, as well as other issues raised in the CDP hearing, the taxpayer must petition within 30 calendar days of the issuance of the Notice of Determination.

  3. 11 USC 362(a)(8) prohibits the filing of a petition with the Tax Court if a taxpayer is in bankruptcy. If a taxpayer petitions Tax Court after filing a bankruptcy petition, the Tax Court petition will be dismissed.

  4. IRC 6330(d)(1) does not provide additional time to petition to persons residing outside of the US.

    Note:

    Special extensions may be available for members of the Armed Forces serving in a combat zone/contingency. See IRC 7508(a).

8.22.9.15.2  (11-13-2013)
Standard and Scope of Review

  1. The table below describes the standard and scope of Tax Court review in a CDP determination:

    If... The standard of review is... The scope of the review is...
    Liability is at issue
    • de novo (anew) for the liability issue.

    • abuse of discretion for other administrative determinations

    With respect to the liability issues, the court is not limited to reviewing the record before Appeals and may hold a trial and take new evidence and testimony.
    Liability is not at issue abuse of discretion The administrative record.

  2. "Abuse of discretion" is generally defined as “arbitrary, capricious, clearly unlawful, or without sound basis in fact or law.”

8.22.9.16  (11-13-2013)
Remand

  1. The Tax Court may remand a case to Appeals when:

    • Appeals abused its discretion, or

    • The taxpayer was not given a proper hearing, or

    • The administrative record is insufficient for the Tax Court to properly evaluate the case

  2. Generally, Counsel does not request a remand absent an error by Appeals. If there is a significant, non-harmless error and the case cannot be defended, Counsel may file a Motion for Remand in Tax Court. Examples of when remand may be appropriate include:

    • Taxpayer requested abatement of interest but Appeals failed to consider the issue

    • Appeals rejected the taxpayer’s OIC without considering financial information provided by the taxpayer prior to the issuance of the determination/decision letter

    • Appeals issued the determination prior to the expiration of an agreed upon deadline for the taxpayer to provide verification information

    • Taxpayer raised liability where liability was not precluded and the Appeals closed the case without addressing liability

    • Appeals findings were confusing or contradictory

  3. Changed circumstances occurring after the CDP hearing that might affect the outcome of the taxpayer’s case are generally dealt with outside of the CDP process. If a taxpayer submits a new issue while the Tax Court case is pending, Counsel may approach Collection per IRM 5.1.9.3.11.1,Post Petition Investigation, to consider the new issue and input any case resolution. The new issue might include, but is not limited to:

    • Collection alternatives

    • CNC

    • ID theft claim

  4. Collection considers the new issue if:

    • The taxpayer’s circumstances changed since the CDP hearing, or

    • The taxpayer did not respond to Appeals during the CDP hearing due to illness or travel and is now offering a collection alternative which would resolve the case

    Example:

    Taxpayer petitions Tax Court and requests an OIC that was not submitted during the CDP hearing. The taxpayer's circumstances have changed. Due to the absence of error by Appeals, Counsel does not request a remand. Instead, Counsel submits Form 656 to Collection to consider and if agreement is reached, Collection inputs the case resolution.

  5. Remand may be appropriate in rare, unusual situations when there has been a change in circumstances that is material and affects the core issues in the case such that, if known at the time of the Appeals hearing, would likely have altered Appeals’ determination. Such remands should be limited to cases in which the taxpayer:

    • fully cooperated

    • submitted all requested and available evidence within the taxpayer's control

  6. The harmless error rule provides that a court should not find an abuse of discretion if the mistake causes no prejudice or does not affect the ultimate determination. This rule is often applied where the taxpayer makes only frivolous or groundless arguments. Counsel evaluates errors to determine whether they are harmless.

  7. When a CDP is remanded, the Counsel attorney prepares a memorandum addressed to Appeals explaining:

    1. The reasons why the court remanded the case

    2. Any special requirements in the order.

    3. What issues the court has ordered Appeals to address on remand

    Note:

    The Counsel attorney provides a copy of this memorandum to the taxpayer/representative.

  8. Rev. Proc. 2012-18 and IRM 8.1.10, Ex Parte Communications, provide guidance on the ex parte rules in communications between Counsel attorneys and the hearing office in remands in CDP cases. A request for legal advice in a remanded CDP may be handled by the Counsel attorney who is handling the docketed Tax Court case. Neither the taxpayer nor their representative have a right to participate in any discussions between Appeals and Counsel regarding the advice.

8.22.9.16.1  (11-13-2013)
Receipt of Remand and Supplemental Hearing

  1. Remands must be worked expeditiously to meet the court-ordered deadline for conducting the supplemental hearing and the responding to the court. The deadline can be found in Area Counsel memorandum accompanying the remand.

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

  3. Send a secure email to APS requesting input of:

    1. Closing code 42, Case Remanded. CC 42 changes the case from PART 3 to PART 2.

    2. REMAND in LOC 3 field.

  4. Contact the taxpayer to schedule the supplemental hearing. Ask if the taxpayer received a copy of Counsel’s memorandum to Appeals regarding the remand. Provide a copy if they have not received one.

  5. Complete the requirements in Counsel's Remand memo including making contact with Counsel by the specified due dates.

8.22.9.16.2  (11-13-2013)
Consideration of a New OIC

  1. When the Tax Court remands a CDP for consideration of an OIC that was not submitted in the initial hearing, card in and consider the new OIC.

  2. If the offer is accepted, prepare the acceptance paperwork. The offer cannot be processed until the Status 72 is reversed so send Counsel the entire accepted offer file along with the supplemental NOD, making sure that Counsel understands it has the original offer and that Counsel must direct APS to process the accepted offer.

8.22.9.16.3  (11-13-2013)
Reconsideration of an Existing OIC

  1. When the Tax Court remands a CDP for reconsideration of an OIC, Appeals reconsiders the original offer. The taxpayer is not asked to submit a new OIC, pay a new application fee or make a new TIPRA payment. However, if the offer amount is increased, the taxpayer must make an additional payment of 20% of the increase.

  2. The original rejection of the offer in the CDP hearing tolls the TIPRA statute under IRC 7122(f) even if the court holds the rejection was erroneous.

8.22.9.16.4  (11-13-2013)
Closing of Remand

  1. Once the supplemental hearing is concluded:

    1. Prepare Letter 3978, Supplemental Notice of Determination, and share with assigned attorney prior to submitting the case to the ATM. The attorney reviews the NOD before it is issued to ensure compliance with the Tax Court's order.

    2. Input AC/FR on the CAR.

  2. Submit to your ATM at closing:

    1. Letter 3978

    2. Case Summary Card

    3. CAR

    4. The administrative file including copies of all letters and documentation issued to or received from the taxpayer regarding the remand

    5. Form 2828 Transmittal Memorandum to return the case to Counsel

    6. If the decision in the case changed during the remand hearing, prepare a new form 5402. If the decision remains the same, a new form 5402 is not needed.

  3. The ATM inputs a revised ACAPDATE and submit to APS for closing

  4. The remand file is returned to APS after the ATM review. APS issues the supplemental NOD and puts the case back into PART 3. Then APS sends the file back to Counsel.

  5. After the Supplemental NOD is issued, the jurisdiction of the case remains with the Tax Court. The Supplemental NOD is not a new determination and does not provide the taxpayer with additional judicial appeal rights.

  6. The taxpayer is not required to re-petition the Tax Court if they disagree with the Supplemental NOD.

8.22.9.17  (11-13-2013)
Retained Jurisdiction (RJ) Hearings

  1. Appeals retains jurisdiction on CDP determinations except as noted in the table below. RJ hearings are available after either:

    • The expiration of the 30 day period for seeking judicial review if the taxpayer does not petition Tax Court or

    • The Tax Court enters a decision and all appeals of that decision are completed

  2. Taxpayers may return to Appeals for a RJ hearing under the following two circumstances:

    If... Then...
    Collection does not implement Appeals' determination
    • Taxpayer should try to resolve the disagreement with Collection's implementation of Appeals' determination with a Collection manager.

    • If Collection and the taxpayer do not agree on a resolution, the taxpayer may return to Appeals for a RJ hearing.

    There is a change in the taxpayer's circumstances which affects Appeals' determination
    • Taxpayers must follow initial CAP procedures in Publication 1660, Collection Appeal Rights. A conference with the Collection manager is encouraged but not mandatory.

    • If Collection and the taxpayer do not agree on a resolution, the taxpayer may return to Appeals for a RJ hearing

  3. During RJ hearings:

    1. Levy action is generally withheld unless collection is at risk. The statute of limitations is not suspended

    2. The ONLY issues considered are those from the original Appeals determination

    3. Taxpayers wishing to raise new issues or tax periods can do so in a CAP request. The CAP request would not need to be sent to Collection first

  4. Taxpayers requesting RJ hearings may qualify for other types of hearings. Explain to the taxpayer the types of hearings they qualify for and the advantages and disadvantages of each.

  5. RJ cases are carded in with type code DPLV, DPLN or DPL2 and feature code "RJ" . Indicate the earliest CSED in the STATDATE field on ACDS.

    1. Attempt to close the case within 5 business days

    2. The hearing officer who worked the original CDP should generally work the RJ hearing

  6. At closing, prepare Form 5402, ACM and the CAP type closing letter for the taxpayer. Form 5402 can serve as your ACM.

Exhibit 8.22.9-1 
Instructions for Completing Customized Form 5402

Item Entry
1. Date Leave blank as APS will fill in.
2. Route to ACS: select address from drop down box
Field: fill in address from Form 3210
3. From Populates from ACDS
4. Features: Populates from ACDS
5. Taxpayer Populates from ACDS
6. TIN Populates from ACDS
7. WORKUNIT NO. Populates from ACDS
8. Tax Years (MFT/Tax Period) "Key Case" MFT and Tax Periods populate from ACDS
9. Type of Case Populates from ACDS
10. Category Code Populates from ACDS
11. WUNO-related MFT/Tax Period(s) If applicable, complete with MFT/Tax Periods related to the WUNO of the case
12. Disposal Information Closing code and CDPTS code fields ACDS populates ARDI Code 7. Employee selects:
Closing code, Premature Referral code (when applicable), Closing information for CDPTS (Reason Code and Resolution Reason) from drop down boxes
13. Special Features, Remarks, and/or Appeal Case Memorandum Complete "Short Statute" if applicable; "Other" box is optional.
If fewer than 90 days remain on a CSED for any timely CDP period, the CSED will be 90 days from the date the CDP determination becomes final (TC 521 date). In such rare cases, make a note in the remarks section of Form 5402: "Short statute: CSED 90 days from TC 521 date. Collection may manually calculate the new CSED and input TC 550."
14. For APS use APS will use this section for TC 521 information
15. Taxpayer telephone # Populates from ACDS
16. Area Counsel/Docket # Completed by APS
17. AO/SO signature date self-explanatory
18. Earliest statute date Populates from ACDS
19. Approval Date ATM signs and dates, if required.
20. Area Counsel Date Counsel signature, if required

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