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Part 5. Collecting Process

Chapter 20. Abusive Tax Avoidance Transactions (ATAT)

Section 1. Abusive Tax Avoidance Transaction Program

5.20.1 Abusive Tax Avoidance Transaction Program

Manual Transmittal

August 19, 2026

Purpose

(1) This transmits revised IRM 5.20.1, Abusive Tax Avoidance Transaction Program.

Material Changes

(1) Modified responsibility in IRM 5.20.1.1.3 from Field Collection to Collection Director, based on organizational changes.

(2) Incorporated IGM SBSE-01-1124-0054, Interim Guidance on Assignment of Form 706-NA Estate Tax Cases to International non-ATAT Revenue Officers, dated 11/06/2024 into IRM 5.20.1.5(3).

(3) IRM 5.20.1.8, Collection ATAT Coordinator Responsibilities was removed from this IRM. The guidance was relocated to IRM sections 1.4.50.10.8.1 to IRM 1.4.50.10.8.4.

(4) IRM 5.20.1.10, Finding ATAT Inventory guidance was removed from this IRM. The guidance was relocated to IRM 1.4.50.10.8.1 to IRM 1.4.50.10.8.4.

(5) IRM 5.20.1.11, Prioritization of ATAT Work was removed from this IRM. The guidance was relocated to IRM 1.4.50.10.8.5.

(6) Editorial updates throughout including: title changes (Territory Manager to Field Compliance Manager), IRM citations updated, clarification of wording, plain language, minor punctuation and grammar revisions.

Effect on Other Documents

This material supersedes IRM 5.20.1, Abusive Tax Avoidance Transaction Program, dated October 1, 2024 and incorporates Interim Guidance Memorandum SBSE-01-1124-0054, Interim Guidance on Assignment of Form 706-NA Estate Tax Cases to International non-ATAT Revenue Officers, dated November 6, 2024 into IRM 5.20.1.5(3).

Audience

The target audience is SB/SE Collection employees.

Effective Date

(08-19-2026)

Thomas D. Kramer
Director, Collection Policy
Small Business/Self-Employed

5.20.1.1 (10-01-2024)

Program Scope and Objectives

  1. Purpose: This IRM section contains information regarding the Collection Abusive Tax Avoidance Transactions (ATAT) program, guidance in identifying and assigning Collection ATAT cases, and the priorities of the various ATAT revenue officer case assignments.
  2. Audience: These procedures apply to SB/SE Collection employees responsible for the assignment and resolution of ATAT cases.
  3. Policy Owner: SB/SE Director, Collection Policy.
  4. Program Owner: SB/SE Collection Policy-Global Strategic Compliance (GSC) is the program owner of this IRM.
  5. Primary Stakeholders: SB/SE Field Collection.
  6. Contact Information: Email recommendations and suggested changes to this IRM to the Content Product Owner. The owner is indicated on the Product Catalog Information page which is found on the Forms/Pubs/Products IRM listing of the Media and Publications website.
5.20.1.1.1 (10-01-2024)

Background

  1. Some taxpayers promote the use of abusive tax schemes, prepare tax returns that use abusive tax promotions, or have unpaid income tax or related penalty liabilities. This IRM provides guidance on collection issues that are unique to abusive tax schemes and the promotion and preparation of tax returns that use abusive tax schemes.
5.20.1.1.2 (10-01-2024)

Authority

  1. The authority to collect a tax assessment is addressed in IRC 6502, Collection after Assessment. Collection principles are described in IRM 1.2.1.6 , Policy Statements for the Collecting Process. This explains why enforcement is a necessary component to move the taxpayer towards compliance with the tax laws and to promote a system of voluntary compliance. Delegation orders for various collection activity are in IRM 1.2.2, Servicewide Delegations of Authority.
  2. IRM 1.2.65.3, SB/SE Functional Delegation Orders - Collection, provides delegation orders that are specific to the Small Business/Self Employed Collection organization.
5.20.1.1.3 (10-01-2024)

Roles and Responsibilities

  1. These procedures apply to Internal Revenue Service (IRS) Field Collection employees who are responsible for investigating and collecting liabilities arising from authorized IRC 6700 /IRC 6701 promoter/preparer penalties, and tax and penalty liabilities from the use of abusive tax promotions described in IRS Notice 2010-33 , Frivolous Positions, and other ATAT inventory. These procedures also apply to Civil Enforcement Advice and Support Operations (CEASO) employees that review certain revenue officer actions related to the collection of the liabilities.
  2. Director, Collection, is the executive responsible for all Field Collection programs.
  3. Director, Collection Policy, is the executive responsible for the policies and procedures followed by Field Collection employees.
  4. Field Collection Area Directors, Field Compliance Managers and Group Managers are responsible for ensuring Field Collection employees comply with these procedures.
  5. Field Collection revenue officers are responsible for following the procedures in this IRM.
  6. Field Collection CEASO employees and Counsel provide advice and may review some of the Field Collection revenue officer collection activity described in this IRM.
5.20.1.1.4 (10-01-2024)

Program Management and Review

  1. IRM 1.4.50 , Collection Group Manager, Field Compliance Manager and Area Director Operational Aid, addresses responsibilities of managers in Field Collection case work.
  2. IRM 1.4.53 , Advisory and Property Appraisal and Liquidation Specialist Group Manager, Civil Enforcement Advice and Support Operations Territory Manager and Director Operational Aid, addresses responsibilities for Civil Enforcement Advice and Support Operations (CEASO) group managers.
  3. Operational and program reviews are conducted to ensure that program delivery and case actions are in accordance with administrative and compliance requirements. National quality and consistency reviews are conducted to ensure program consistency and effectiveness in case processing. See IRM 5.13.1 , Embedded Quality Collection Field Organizations Administrative Guidelines.
5.20.1.1.5 (10-01-2024)

Program Controls

  1. Field Collection managers perform program controls by performing case consultations, reviews, employee observations and security reviews. IRM 1.4.50, Collection Group Manager, Field Compliance Manager and Area Director Operational Aid, communicates responsibility for management to implement and monitor required internal controls. The Integrated Collection System, ENTITY Case Management System and Embedded Quality System provide management with case access and data to monitor internal controls.
  2. Management uses management information reports from the Integrated Collection System (ICS) and ENTITY systems to monitor and track timely and appropriate case actions. ICS contains unique case sub-codes to identify ATAT cases. The ENTITY database also contains queries to assist in the identification of ATAT cases.
  3. Reports from the Embedded Quality Review System (EQRS) to measure program consistency, effectiveness in case actions and compliance with policy and procedures. Trends from these reports are used to recommend improvements where necessary when errors are identified. Reports from EQRS provide management information used in guiding revenue officers to take timely, effective and appropriate case actions.
5.20.1.1.6 (08-19-2026)

Terms and Acronyms

  1. This table below lists commonly used acronyms and their definitions.

    AcronymDefinition
    ANMFAutomated Non-Master File
    ATATAbusive Tax Avoidance Transaction
    CIPCompliance Initiative Program
    E&GEstate and Gift
    FRPFrivolous Return Program
    ICSIntegrated Collection System
    IRSNInternal Revenue Service Number
    LDCLead Development Center
    MFTMaster File Tax
    OIOther Investigation
    PSPExam Planning and Special Programs
5.20.1.1.7 (08-19-2026)

Related Resources

  1. The table below contains related IRM Resources:

    IRM Resources
    IRM 4.24.6.2.3, Excise Examinations with Wagering Issues
    IRM 4.32, Abusive Transactions
    IRM 5.1.5.16.2, Issuing Other Investigations (OI) to Abusive Tax Avoidance Transaction (ATAT) Collection Groups
    IRM 5.5.6, Collection on Accounts with Special Estate Tax Elections
    IRM 5.5.7, Collecting Estate Tax
    IRM 5.5.8, Advisory Responsibilities for Processing Estate Tax Liens
    IRM 5.5.9, Collecting Gift Tax and Generation-Skipping Transfer Tax
    IRM 5.20.2.4, Special Compliance Program Designation
    IRM 5.20.8, Promoter/Preparer Investigations
    IRM 5.20.8.2, Making a Referral to the SB/SE Lead Development Center (LDC)
    IRM 5.20.8.4, Coordination with the Examination Function
    IRM 5.21.1 , Expanded Definition of International Field Collection (FC) Program Casework

     

  2. Web Resources: Abusive Tax Avoidance Transactions Knowledge Base - Home
5.20.1.2 (10-01-2024)

Overview of Abusive Tax Avoidance Transaction (ATAT) Program

  1. This IRM provides procedural guidance for Abusive Tax Avoidance Transaction (ATAT) Collection investigations. It provides an overview of the Collection ATAT program and supporting references. Refer to IRM 4.32, Abusive Transactions for additional guidance on Servicewide ATAT programs.

    Note:

    In FY 2022, SB/SE Examination created the separate Office of Promoter Investigations (OPI), in addition to the SB/SE Examination-based Abusive Transactions program. SB/SE Collection continues to use the acronym ATAT for its abusive transactions program.

     

  2. Definition of ATAT: An abusive tax avoidance transaction includes the organization or sale of any plan or arrangement promoting false or fraudulent tax statements or gross valuation misstatements, aiding, or assisting in the preparation or presentation of a return or other document to obtain tax benefits not allowed by law, and actions to impede the proper administration of Internal Revenue laws. This general definition includes both tax shelters as defined in various sections of the IRC and other types of abusive tax promotions. These strategies may be formally organized and marketed, or perpetuated and distributed informally, often through the internet. The definition is not merely limited to activities that reduce tax liability but may also include transactions that conceal assets and/or income from Collection and the submission of frivolous tax returns and documents used to impede tax administration.

  3. ATAT promotions include, but are not limited to, programs that rely on:

    • False statements about the allowance of tax benefits to participants that are contrary to established law.
    • Intentional manipulation or misapplication of IRC sections to improperly claim tax benefits.
    • Sham arrangements having no economic significance or business purpose other than the avoidance, evasion, or non-payment of tax.
    • Gross valuation misstatements that ascribe a value to an asset or service that is at least twice the correct value and result in a tax reduction.
    • Noncompliance with disclosure requirements of IRC 6111, Disclosure of Reportable Transactions.
    • Noncompliance by material advisors with the list maintenance requirements of IRC 6112, Material Advisors of Reportable Transactions Must Keep Lists of Advisees, etc.
    • Attempts to impede the proper administration of tax laws.
    • Gross overstatement of withholding or refundable credits to obtain false refunds.

     

5.20.1.3 (08-19-2026)

Collection's Role in ATAT

  1. There is an ATAT program in each Field Collection Area with one or more ATAT Coordinators (group managers) who provide oversight and act as a central point of contact and coordination for the ATAT program in their Area. IRM 1.4.50.10.8.1, Collection ATAT Coordinator Responsibilities defines the responsibilities of this role.
  2. SB/SE Collection Policy supports Area ATAT programs by providing policy guidance, technical assistance, and ad hoc training.
  3. The Collection ATAT program partners with other divisions including SB/SE Examination and LB&I, to assist in the development of abusive scheme promoter/preparer investigations and to ensure effective collection action is taken, when necessary, as early as is allowable by law against promoters, preparers and participants in abusive schemes.
  4. In addition to supporting Exam AT programs, ATAT revenue officers may uncover new or similar abusive schemes and possible promoters/preparers during their collection investigations. This information can then be provided to the SB/SE Lead Development Center (LDC) which is the conduit for promoter/preparer leads. Procedures for making referrals to the LDC are in IRM 5.20.8.2, Making a Referral to the SB/SE Lead Development Center (LDC).
5.20.1.4 (10-01-2024)

Sources of ATAT Casework

  1. Most identified balance due ATAT cases are the result of a promoter or preparer investigation and penalty, or an examination regarding an abusive tax scheme. The Examination function identifies, classifies, and examines abusive promoter/preparer and abusive promotion cases. Through ongoing identification of new abusive schemes by Examination and other operating divisions, Collection ATAT has inventory assignments related to current and prior abusive tax schemes.
  2. The Collection ATAT program also provides support for compliance settlement initiatives related to certain abusive transactions. Taxpayer segments that have participated in a specific abusive transaction may be offered an opportunity to accept a settlement of the examination issues related to that transaction. The terms of the settlement are specific and the time frame for accepting the settlement offer are firmly established. The settlements are temporary compliance initiatives with specific conditions related to the payment of the liability. Collection plays a key role in ensuring settlement conditions are met. For this type of casework, procedures are established and provided to the revenue officers assigned collection referrals.
  3. Refund schemes based on false withholding claims or refundable credits are another type of abusive scheme. If campus operations fail to stop bogus refunds from issuance, ATAT revenue officers may be contacted to assist with refund recovery. Refund scheme cases are generally identified by the Frivolous Return Program (FRP), which creates an assessment for the falsely claimed credits and contacts SB/SE Collection Policy to coordinate assignment of the resulting ATAT case to the field.
5.20.1.5 (08-19-2026)

Other Casework directed to ATAT

  1. The Collection ATAT program works Estate and Gift Tax cases. The E&G cases worked by Collection ATAT include modules with Master File Tax (MFT) codes of 51, 52, 53, 54, 77, 78 and non-master file accounts (NMF) 53 and 54. See E&G IRM 5.5.6, Collection on Accounts with Special Estate Tax Elections, IRM 5.5.7, Collecting Estate Tax, IRM 5.5.8, Advisory Responsibilities for Processing Estate Tax Liens, and IRM 5.5.9, Collecting Gift Tax and Generation-Skipping Transfer Tax.

  2. ATAT program support also extends to certain high priority cases identified as casework to be assigned to ATAT revenue officers:

    • In wagering cases with an excise tax liability of $75,000 or greater, examiners are directed to request the assistance of an ATAT revenue officer to determine collectability. See IRM 4.24.6.2.3, Excise Examinations with Wagering Issues.
    • In highly technical and specialized probation and restitution cases, the Advisor will issue an Other Investigation (OI) to an ATAT Collection group if one or more of the criteria listed in IRM 5.1.5.16.2, Issuing Other Investigations (OI) to Abusive Tax Avoidance Transaction (ATAT) Collection Groups, are met.

     

  3. While ATAT Collection works estate and gift cases, International Collection will work Form 706-NA (MFT 52) cases with an international address. This estate case type will be assigned to International and International ATAT revenue officers. An estate must file Form 706-NA if the decedent was neither a U.S. citizen nor a U.S. resident at the date of death, and owned an interest in U.S. property that met the filing threshold. Form 706-NA estate tax accounts most commonly appear under an IRS-assigned Internal Revenue Service Number (IRSN), which begins with the number "9" , because nonresident, noncitizen decedents often do not have a U.S. SSN or ITIN. However, Form 706-NA accounts may appear under an SSN or ITIN when the decedent had previously been issued one. See IRM 5.21.1.3(2), Sources of International Program Cases, and IRM 5.5.7, Collecting Estate Tax, for additional information.
5.20.1.6 (10-01-2024)

Coordinating Early Intervention with Other Functions

  1. Referrals to ATAT revenue officers may come from SB/SE Collection, Examination, LB&I, FRP, Counsel, Criminal Investigation or any other function within the IRS. Examination procedures direct revenue agents to consult, coordinate and cooperate with ATAT revenue officers during the examination phase when circumstances warrant. For more information, see IRM 4.32.3.4, Collection. Collection support in the form of early intervention can save time and provide both functions with valuable leads. An early exchange of information assists the revenue officer with preparing a collection strategy and expedites the collection process.

  2. Early intervention is a request for the assistance of an ATAT revenue officer, usually originating from the Examination function, in advance of an assessment. The revenue officer assists Examination in one or more of the following ways:

    • Evaluating collection potential
    • Assisting with a possible jeopardy situation
    • Explaining payment options to taxpayers
    • Assisting in the development of a promoter/preparer investigation
    • Sharing leads on income and assets located
    • Researching ongoing or prior collection activities that could provide important context to the investigation

     

  3. The ATAT Coordinator is the central Collection contact point for examiners and Examination group managers. Examiners conducting promoter/preparer investigations who are requesting early intervention Collection assistance on any ATAT case should contact the local ATAT Coordinator through their group manager. A list of ATAT Coordinators can be located in the Abusive Tax Avoidance Transactions Knowledge Base.
  4. The ATAT Coordinator will assign the case based on established work plan priorities to a revenue officer. If a revenue officer is expected to charge over 30 minutes of time working with an examiner, a Compliance Initiative Program (CIP), CIP-Other, will be opened on Integrated Collection System (ICS). A CIP authorizes revenue officers to work cooperatively with examiners, maintain a history of actions taken, and charge time to the case.
5.20.1.7 (08-19-2026)

Assistance on Promoter/Preparer Investigations

  1. Once a promoter/preparer lead is approved by the SB/SE Lead Development Center and assigned to an examiner, Collection Policy sends the local ATAT Coordinator a copy of the approved IRC 6700/6701 investigation memorandum.
  2. Prior to assessment of a promoter/preparer penalty, the ATAT Coordinator is responsible for determining if a promoter/preparer investigation should be assigned to an ATAT revenue officer. The ATAT Coordinator will consult with the local Examination AT manager to decide if or how a revenue officer might assist in the investigation. Generally, if the promoter/preparer or a related entity has a preexisting liability, assignment to an ATAT revenue officer is warranted.
  3. The ATAT Coordinator will ensure assessed promoter/preparer penalties in their Area are assigned to ATAT revenue officers. See IRM 1.4.50.10.8.1 , Collection ATAT Coordinator Responsibilities, for information on ENTITY queries to identify these penalties in the collection queue.
  4. See IRM 5.20.8, Abusive Tax Avoidance Transactions, Promoter/Preparer Investigations, for more information on promoter/preparer investigations.
5.20.1.8 (08-19-2026)

Assigning ATAT Cases within Collection

  1. The ATAT Coordinator is the central contact point for ATAT cases within Collection. See IRM 1.4.50.10.8.1(3) for additional guidance on transfer cases to the ATAT group. The ATAT Coordinator will determine whether to accept case transfer based on workload priority and case appropriateness. If the case is not accepted for transfer, the ATAT Coordinator may offer the assistance of an ATAT revenue officer in working the case.

  2. Cases with an ATAT ICS sub-code may be worked by a general program revenue officer. However, ATAT promoters/preparers, Compliance Impact – High Profile ATAT cases, Refund Schemes, Exam Referrals on settlement initiatives and estate & gift tax cases generally should remain assigned within the ATAT program. The local ATAT Coordinator will determine whether to keep a case within the ATAT program or work with the general program to assign the case.

    Example:

    When a taxpayer relocates outside the geographic area covered by the ATAT group, the ATAT Coordinator will ensure any investigation of assets in the taxpayer’s original location is concluded. The ATAT Coordinator will generally transfer the case to the local ATAT Coordinator where the taxpayer resides. The local ATAT Coordinator will determine whether to assign the case to an ATAT revenue officer or work with a local general program group manager to assign the case to a general program revenue officer. Similarly, the ATAT Coordinator issuing an OI to research a taxpayer’s assets may route the OI to the local ATAT Coordinator. The local ATAT Coordinator will either assign the OI to an ATAT revenue officer or work with a local group manager to assign the OI to a general program revenue officer.