4.4.10 Employment/Excise Tax Adjustments

Manual Transmittal

November 29, 2022

Purpose

(1) This transmits revised IRM 4.4.10, Audit Information Management System (AIMS) - Validity and Consistency, Employment/Excise Tax Adjustment.

Material Changes

(1) IRM 4.4.10 has been extensively revised throughout. Names of functional areas have been changed to reflect the current organizational structure and the IRM has been reorganized. A summary of significant changes is reflected below:

IRM Subsection Description of Change
IRM 4.4.10.1 Title was changed to Program Scope and Objectives, and information was added to clarify the IRM Purpose, Audience, AIMS Policy Owner, and AIMS Program Owner.
IRM 4.4.10.1.1 Added new subsection: Background.
IRM 4.4.10.1.2 Added new subsection: Responsibility.
IRM 4.4.10.2, Processing and Maintenance of Form 4668, Employment Tax Examination Changes Report, - Group Responsibility This section has been obsoleted. Procedures for this section can be found in IRM 4.23.10.10.9, Form 4668 and IRM 4.23.10.12, Securing Form W-2 or W-2c.
IRM 4.4.10.2.1, Conversion of Independent Contractor to Employee - Group Responsibility This section has been obsoleted. Procedures for this section can be found in IRM 4.23.10.12.1, Conversion of Worker Status and IRM 4.23.10.10.9, Form 4668.
IRM 4.4.10.2.2, Preparation for Form 4668 Tickler File - Group Responsibility This section has been obsoleted. Procedures for this section can be found in IRM 4.23.8.10.2, Delinquent Forms W-2/W-2c Not Secured by Examiner.
IRM 4.4.10.2.3, Processing and Maintenance of Form 4668 Tickler File - CCP Responsibility This section has been obsoleted. Procedures for this section can be found in IRM 4.23.8.10.2, Delinquent Forms W-2/W-2c Not Secured by Examiner.
IRM 4.4.10.2.4, Barred Periods - Group Responsibility This section has been obsoleted. Procedures for this section can be found in IRM 4.23.10.12, Securing Form W-2 or W-2c.
IRM 4.4.10.2.5, Adjustments to Railroad Retirement Tax Act (RRTA) - Group Responsibility This section has been obsoleted. Procedures for this section can be found in IRM 4.23.10.10.1(6), Railroad Retirement Tax Act (RRTA) Examination.
IRM 4.4.10.2.5.1, Adjustments to RRTA - CCP Responsibility This IRM section has been re-numbered to IRM 4.4.10.2.
IRM 4.4.10.2.6, Reconciling Transmittal Forms - Group and CCP Responsibility This section has been obsoleted. Procedures for this section can be found in IRM 4.23.10.12(4), Securing Form W-2 or W-2c.
IRM 4.4.10.2.6.1, Combined Form W-2/Form W-3 and Form W-2C/Form W-3C - Group Responsibility This section has been obsoleted. Procedures for this section can be found in IRM 4.23.10.12(4), Securing Form W-2 or W-2c.
IRM 4.4.10.2.6.2, SSA Addresses This section has been obsoleted. Procedures for this section can be found in IRM 4.23.8.10.1, Delinquent Forms W-2/W-2c Secured By Examiner Due to Examination Adjustments and IRM 4.23.10.12, Securing Form W-2 or W-2c.
IRM 4.4.10.2.6.3, Penalty Referral for Not Filing Form W-2/Form W-2C - CCP Responsibility This section has been obsoleted. Procedures for this section can be found in IRM 4.23.8.10.2, Delinquent Forms W-2/W-2c Not Secured by Examiner.
IRM 4.4.10.2.6.4, Document Code 54 Carryback Penalty Adjustments - CCP Responsibility This section has been obsoleted. Procedures for this section can be found in IRM 20.1.4.21.5, Adjusted Returns (Forms 941-X, 943-X, 944-X, 945-X, and CT-1X).
IRM 4.4.10.3, Processing Employee Share of FICA - CCP Responsibility This section has been obsoleted. Procedures for this section can be found in IRM 4.23.10.17.3.1, Partial Assessment/Quick assessment Processing for Form 1040 relating to Employment Taxes - Non-Deficiency Procedures.
IRM 4.4.10.4, Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return, Adjustments, - Group Responsibility This section has been obsoleted. Procedures for this section can be found in IRM 4.23.10.10.8, Form 4667 and IRM 4.23.8.7, Federal Unemployment Tax.
IRM 4.4.10.4.1, Processing Form 940 Federal Unemployment Tax Adjustments - CCP Responsibility This IRM section has been re-numbered to IRM 4.4.10.3.
IRM 4.4.10.4.2, Reference Codes This section has been obsoleted. Procedures for this section can be found in IRM 21.3.4.5 and IRM 21.7.3.4.7.
IRM 4.4.10.5, Schedule H (Form 1040) Household Employment Taxes, - Group Responsibility This section has been obsoleted. Procedures for this section can be found in IRM 4.23.10.10.5, Household Employment Taxes.
IRM 4.4.10.5.1, Employer Identification Number (EIN) - CCP Responsibility This IRM section has been re-numbered to IRM 4.4.10.4.
IRM 4.4.10.6, Completion of Form 5344 for Employment Tax Closures - Group Responsibility This section has been obsoleted. Procedures for this section can be found in IRM 4.23.10.20, Form 5344/5599 - Additional Entries for Completion of Employment Tax Closures.
IRM 4.4.10.7, Excise Civil Penalty Procedures (Fuel Compliance Program Penalties) This section has been moved to IRM 4.4.10.5.
IRM 4.4.10.7.1, Dyed Fuel Penalty Controls and Assessment This section has been obsoleted. Procedures for this section can be found in IRM 4.24.13.5, IRM 4.24.13.5.1, IRM 4.24.13.5.2, IRM 4.24.16.2, IRM 4.24.16..2.3, IRM 4.24.16.2.10, IRM 4.24.16.2.4, IRM 20.1.11.6.3, IRM 20.1.11.7.2, IRM 20.1.11.8.2.2, IRM 20.1.11.8.4.2, IRM 20.1.11.8.5.2, and IRM 20.1.11.8.6.2.

Effect on Other Documents

This revision supersedes the previous IRM 4.4.10, Employment/Excise Tax Adjustments, dated October 07, 2011.

Audience

This IRM section is for use by employees in Centralized Case Processing (CCP) Large Business and International (LB&I) and Small Business/Self-Employed (SB/SE) .

Effective Date

(11-29-2022)

Lori L. Roberts
Director, Technology Solutions
Small Business/Self-Employed Division

Program Scope and Objectives

  1. Purpose: This section provides general instructions and guidelines for Employment/Excise Tax Adjustments, Centralized Case Processing (CCP).

  2. Audience: The audience for this IRM section will be Examination (CCP).

  3. Policy Owner: The Director, Technology Solutions Small Business/Self-Employed, who is under the Director, Operations Support.

  4. AIMS Program Owner: Exam Systems and Projects, Customer Service.

Background

  1. The procedures, which were in this IRM, pertained to Employment/Excise Tax Adjustments. The procedures do not pertain to the AIMS IT system, which is the title of this IRM. IRM references are given in the Material Changes, for the procedures previously located in this IRM. Centralized Case Processing (CCP) Procedures, remaining in this IRM, will be included in the new IRM 4.38.1 Examining Processing, Centralized Case Processing (CCP), Organization and Responsibilities.

Responsibility

  1. Headquarter Examination is responsible for all policy and procedures related to CCP.

Adjustments to Railroad Retirement Tax Act (RRTA) - CCP Responsibility

  1. CCP will forward copies of Form 4668, Form 886-A, Explanation of Items, and attachments pertinent to Chapter 22 taxes, for all agreed railroad employment tax examination reports to the Railroad Retirement Board (RRB). The address for the RRB is:

    Railroad Retirement Board
    Chief Financial Officer
    844 N. Rush Street
    Chicago, IL 60611

Processing Form 940 Federal Unemployment Tax Adjustments - CCP Responsibility

  1. For all increases or decreases in FUTA tax or wages, in which Disposal codes 03, 04, 08, 09, or 10 are used, unique reference codes must be entered with the tax adjustment. If the adjustment is for penalties only, use Disposal Code 12 to bypass the reference code requirement.

Employer Identification Number (EIN) - CCP Responsibility

  1. If the EIN per the original Schedule H, (Form 1040) is incorrect or there was no Schedule H, (Form 1040) filed as follows:

    1. Use IRS Reference Number (IREF) 993 to add or correct the primary taxpayer’s nine digit EIN.

    2. Use IREF 994 to add or correct the secondary taxpayer’s nine digit EIN.

Excise Civil Penalty Procedures (Fuel Compliance Program Penalties)

  1. The following procedures apply to excise civil penalties proposed by fuel compliance officers (FCOs) and fuel compliance agents (FCAs).

  2. The Issue Management System (IMS) computer application allows FCOs and FCAs to enter inspection and penalty information into a laptop computer. The information is transmitted to a host server. The group manager accesses the server to review cases and approve recommended penalties. Once the penalty is approved, the penalty case will be established and controlled utilizing the Examination Returns Control System (ERCS). After group manager approval of the penalty, the case will be closed to CCP.