APS has primary responsibility for the following:

APS utilizes a variety of reports from the following systems to verify, control, analyze, monitor, and close cases resolved under Appeals’ and/or Counsel’s jurisdiction:

The following IRMs provide specific information related to APS program reports:

The APS processing IRM terms and acronyms are provided in the following Exhibits:

Additional APS program information and resources are available as provided below:

The following workstreams are closed using ACMS “auto-close” functionality and no longer require closure processing by APS:

To fully close a case on ACMS, APS must create the following action records in sequence:

APS account adjustment work requires an understanding of multiple AIMS and IDRS Command Codes (CC). The most common CCs used by APS are listed below and associated with a link to their respective IRMs. When an APS TE receives an error message based upon the data they’ve input, they must access the applicable IRM to locate the error message cause and cure. The IRM associated with the respective CC also provides detailed explanations for the various fields applicable to the CC.

When the ATE provides instructions to transmit a copy of the E-5402 (Printable View) and ACM back to the originating function, APS must use a secure electronic process when available for the specific workstream; otherwise see (4) below. When necessary, make a copy of the E-5402 (Printable View) and ACM to retain the original in the administrative file.

The step action chart below provides instructions for APS employees to electronically transmit Appeals Feedback Loop documents to the compliance function designated by the ATE on the E-5402 (Printable View):

General hardcopy E-5402 (Printable View) Appeals Feedback Loop distribution procedures are detailed below and are used when electronic transmission is not possible:

The ATM will confirm that all documents required for APS processing are uploaded into ACMS. The ATE or ATM, as appropriate, will electronically sign closing letters. The ATM will sign and date other forms requiring the ATM's signature and approve the case closure in ACMS. The ATE/ATM will retain possession of the closed case file until shipping instructions are provided by APS. APS will perform the normal case closing actions, including any feedback loop processes. After APS has completed all closing actions:

Case Eligibility and Required Documentation* If necessary

APS will follow these steps to close a paperless case:

APS employees will not print documents for archiving if the documents are already uploaded to ACMS. The procedures for printing documents during the closing stage is described below:

Account and adjustment source documents must still be completed and affixed to the paper case file or adjustment authorization document(s) by APS when submitting the completed paper case to campus files.

All manual interest computations must be printed and associated with the respective SD(s):

Cases will be identified for AQMS review:

AQMS will:

APS will:

The following list provides an explanation of errors that result in AQMS-selected cases being returned to APS but do not require issuance of a PER:

All APS employees are required to use the AMA2859 tool in the Automated Form 2859 Portal when preparing Form 2859. Use of the portal by APS TEs and PTMs requires a BEARS request for access. Information on the use of this tool is available at the Automated Manual Assessments SharePoint site.

When an APS TE prepares the Form 2859, a complete manual re-computation of the interest for the account, which is also known as a "running module balance" is required. See IRM 20.2.5.6.2, Manual Computations, and the specific paragraphs identified below in ( ) for the following information:

The online Form 2859 includes detailed instructions on page 3. Instruction 5 directs the reader to a table of Special Instructions specific to the respective Tax Return Form Number. Part C entries must be completed per the instructions based upon the MFT being assessed.

When a manual interest computation is prepared, the tax examiner who manually calculates the interest must prepare and mail to the taxpayer Letter 3535, Interest Computation Cover Letter, and the ACT Report 490 Activity Summary, in compliance with IRC 6631. Adherence to this requirement supports the Taxpayer Bill of Rights:

See IRM 4.38.1.7.3.4.4, Research and Actions Required Prior to Quick Assessment, CCP or Campus Examination Procedures, for IDRS related actions.

See IRM 4.38.1.7.3.4.10, Quick Assessment Verification Form 3552, Prompt Assessment Billing Assembly, paragraphs (1) - (3) are included below for emphasis and insertion of specific APS actions:

IRM 4.38.1.7.3.4.10.1, Follow-up on Form 3552, paragraphs are partially duplicated below for emphasis and insertion of specific APS actions:

The ACMS record can be closed upon completion of the following actions:

The following acronyms and abbreviations are used within Exhibit 8.20.7-12, Entries for the Final Form 5403 Preparation to Close AIMS After a Quick Assessment has been Processed:

Appeals uses the Corporate Database Initiative (CDI) Transmittal Database for Form 3210. This has replaced printing multiple copies, filing, follow-up, physical retention and maintenance, storage, and the manual purge process of Form 3210 with an electronic process. The CDI Transmittal Database SharePoint site provides an active user with the following benefits and efficiencies:

E3210 initiators will click on the "Unacknowledged" button to retrieve a listing of the unacknowledged transmittals associated with their User Profile. This systemic process replaces the manual process of locating the retained paper copy of the Form 3210 to perform mandatory follow-up and acknowledgement verification.

Document 6209 contains a detailed listing of CRNs and IRNs for the following types of Tax Returns/Forms:

See Document 6209, Section 8C - Master File Codes, for each code and code definition.

For additional information on account analysis and account codes, see:

When the CRN and IRN adjustment entries exceed the maximum number of entries allowable on either type of adjustment document, use the decision table in IRM 8.20.7.10.4 (5) below to accurately process multiple account adjustments input within the same IDRS Cycle.

When two separate adjustment documents must be used in order to input the full range of CRNs/IRNs applicable to that tax period’s account, use the decision table below to determine how the first and the final adjustment documents must be prepared for the AIMS or the Non-AIMS adjustment(s).

The Form 5403 for a no change case with self-employment income/tax adjustments must reflect any adjustments to IRN 878/879, 895/896, and 889. Complete as follows for Items 12, 13, and 15:

To view the Social Security Tax Rate Table and Wage Limitation established for each tax year see:
✓ Social Security Tax Rate Table.

See the following resources for additional information:

for additional information.

Schedule H adjustments, when are authorized by a signed Form 2504, or a signed Form 2504-AD, Offer of Agreement to Assessment and Collection of Additional Tax and Offer of Acceptance of Overassessment (Employment Tax). Schedule H adjustment amount(s) are provided to APS via the following forms:

The following IRNs are used to process Social Security and Medicare adjustments to the MFT 30 Schedule H account fields:

The following IRNs are used to process Federal Unemployment Tax Act (FUTA) adjustments to the MF Schedule H account fields:

Schedule H adjustments must be processed correctly to avoid the following Unpostables:

Estate and Gift tax IRNs are used to identify adjustments to each specific tax type:

The following fields are also entered for MFT 51/54 on page 2 of Form 5403 when adjustment amounts are included on the Form 5403 Instructions to APS prepared by the TCS:

The new more specific PRNs are as follows:

APS TEs process adjustments on AIMS and Non-AIMS cases. The Form 5403 is an AIMS adjustment document (Document Code 47), and the Form 5403 Item 02, PRC, is a 2 digit code entered by the APS TE to identify the justification provided by the ATE or Counsel attorney for reducing or suppressing the penalty(ies) proposed by the Compliance revenue agent. Reduction of a proposed penalty is different than reduction of a previously assessed penalty because although the penalty amount was proposed, it has not been assessed prior to being transferred into Appeals’ or Counsel’s Jurisdiction. For procedures on partially or fully abating "previously assessed" penalties using a Non-AIMS Command Code ADJ54, see the following IRM section(s), as applicable:

When the FTP (TC 27X) is sustained, but has not previously been restricted and has not been calculated to be assessed at a specific dollar amount, APS may use a PC to trigger the IDRS programming computation and adjustment for FTP (TC 27X). See list below for PC 5 and PC 9 criteria:

When the taxpayer’s AIMS account reflects a late filed return (AMDISA Del-Ret-Ind = 1) and the ATE does not sustain assessment of the Failure to File Penalty (FTF) and/or Failure to Pay Tax (FTP) penalty shown on the Form 4549, Report of Income Tax Examination Changes, prepared by Compliance, the APS TE must systemically "suppress" MF programming from generating the TC 16X and/or TC 27X penalty. APS will enter the applicable PRC in Item 02 of Form 5403, and also enter the applicable penalty TC in Item 12 with a $0.00 to suppress the FTF and FTP penalty.

IRC 6651(a)(1) (FTF Penalty suppression) and IRC 6651(a)(2) TC 270 $0.00 (FTP Penalty suppression). When ACMS includes an amount in the Proposed Penalty field on ACMS and the APS TE enters a lesser amount in the Revised Penalty field, then the APS TE must also enter the applicable PRC in Item 02 of Form 5403.

The PRCs available for manual input in Item 02 of Form 5403 on a non-docketed or docketed case are as follows:

Restricted interest and/or special processing actions may apply to a variety of case types. APS TEs will perform interest computation and special processing actions as appropriate to each tax period. The TCS prepares the following forms and/or notates the Form 5403 Instructions to APS Worksheet when specific interest provisions apply:

If the adjustment involves railroad retirement tax Form CT-1, Employer's Annual Railroad Retirement Tax Return (MFT 09), and/or Form CT-2, Employee Representative's Quarterly Railroad Tax Return (MFT 72), the ATE or ATCL will prepare the disclosure information package for APS to forward to the Railroad Retirement Board (RRB):

APS will use Form 3210/E3210 to transmit the disclosure package to the RRB at the following address:

Below is a list of forms prepared in different cases but not necessarily in every case. The following guidance is provided for associating these forms with the tax return at closing.

Appeals sends a closing letter to notify taxpayers that their case is being closed. 
The ATE:

The employee who sends the closing letter will:

Prepare Form 6759, Request for Taxpayer Data, and forward to a designated APS Exam approver as listed on the APS SharePoint site. Once the signed Form 6759 is received back, forward to the appropriate user support contact.

These Non-AIMS adjustment closings are explained within this IRM under each case type:

APS must verify the following items when entered by ATE, or complete the following items on Form 3870 as follows:

All adjustments AIMS and Non-AIMS must have the adjustment SD associated with the administrative file as well as a copy of the adjustment SD sent to campus files for association with the Form 5147, IDRS Transaction Record, when Item 25 SD = "Y" .

The following IRM references provide guidance on Non-AIMS Adjustments and the Correspondence Received Date (CRD):

Accounts showing an Informant Claim Indicator of "3" on CC AMDISA cannot be processed through AIMS without contacting the Whistleblower Office (WBO). IDRS will not allow the adjustment to be input. Tax Examiners are required to reach out to WBO to request the ICE indicator be updated. Requests will be emailed to the ICE team at *WO ICE Team. The following closing documents must be included with the request:

The Taxpayer Bill of Rights requires all account actions to be made in a timely and accurate manner. The APS TE must ensure the account actions/updates/adjustments are completed as authorized, and the applicable balance due notice, refund of overpayment, and interest adjustment(s) supporting the following taxpayer rights are upheld with the closing of the Appeals or Tax Court case:

When a case is decided or determined with finality, by Appeals, Counsel, or the USTC, the APS TE is responsible for taking the following actions:

The following conditions identify a bankruptcy filing:

The ATE will address all bankruptcy conditions on their case prior to forwarding the case to APS for processing actions, whether the case is agreed or unagreed. The IRS is not prohibited from making assessments and the ASED is not suspended as a result of the bankruptcy filing. APS must be aware that on non-docketed cases, the assessment must be made or the SND must be issued prior to the existing ASED.

E-5402 (Printable View), Form 5403, and closing letter are forwarded to APS by the ATE. The ATE will identify the correct ASED for APS in Item A on the Form 5403.

When the ATE submits the unagreed case to APS for issuance of the SND, APS will take the following steps:

When the taxpayer files an objection to the Government’s claim during the time the case is in the ATE's active inventory, the ATE will stop working the case, identify the Counsel or the Department of Justice Office address where the administrative file must be sent after issuance of the notice, and forward the case to APS for the following actions:

Campus sourced cases will be sent back to the campus functional unit that issued the SND:

To return the case to the originating function, APS will take the following actions:

Complete Form 3210/E3210 as follows:

Complete the remaining fields of Form 3210/E3210 as appropriate.

The tax law provides for interest on overpayments in respect to any internal revenue tax, in accordance with IRC 6611. For an examination-sourced case, Appeals will expedite the closing of an overpayment case that meets the "large dollar criteria" - described in IRM 4.10.8.2.4.3, Large Dollar Cases, and as shown on Exam’s Form 3198, Special Handling Notice for Examination Case Processing. An overpayment case meets the "large dollar criteria" if the total amount of a period’s tax overpayment plus penalties exceeds $100,000.

The expedite procedures include the following:

For abatement of interest claims allowed in full:

For abatement of interest claims allowed in part:

For abatement of interest claims disallowed in full:

Update ACMS for all abatement of interest closings using general closing procedures and the following cc’s:

Campus claims are normally not controlled on AIMS.

When AIMS controls have not been established, process the adjustment to IDRS using Non-AIMS CC: REQ54:

Date and mail one of the following closing letters, prepared by the ATE:

The following are the ACMS entries required at closing:

Actions for inputting the adjustment on claims:

Claims for abatement and/or refund may require one or both of the following actions:

When Appeals sustains conversion of Form 1041, U.S. Income Tax Return for Estates and Trusts to Form 1120, U.S. Corporation Income Tax Return the case requires the following special processing actions:

When Appeals sustains the conversion from Form 1120S, U.S. Income Tax Return for an S Corporation, to Form 1120, U.S. Corporation Income Tax Return, the case requires the following two steps:

Furnish the following information:

Taxpayers who originally file a joint return may not change the filing status to separate once the time for filing the return of either spouse expires.

Update ACMS following the instructions provided on the E-5402 (Printable View) or Form 1734 to close ACMS.

Each conversion of a Joint to Separate, Single, or Head of Household account must be analyzed and processed based upon the applicable account condition(s). See the following IRM 21.6.1, Filing Status and Exemption/Dependent Adjustments, sections for additional information:

Taxpayers may elect to go from separate filing status to joint filing status if the following apply in that taxable year:

For docketed cases, the TCS/Counsel attorney will provide the Form 5278 and Form 5403 Instructions to APS to identify the approved changes for the taxpayer’s account(s).

See the following IRM 21.6.1 sections for additional and supplementary information:

If The entered decision/order document, or the order of dismissal is not available as an ACMS attachment, it is available via the United States Tax Court Website.

The APS TE must always verify whether or not an entered decision includes the IRC 6213(a) waiver paragraph.

If the waiver paragraph is not included, the APS TE must verify that 100 days (90 + 10) have elapsed from the decision entered date to avoid an invalid/premature assessment action during the period of time the taxpayer or the IRS can file an appeal the Tax Court decision.

The following APS instructions are for Tax Court Orders to Dismiss for LOJ AFTER an SND has been issued to the taxpayer. These instructions do not apply to the following case types:

The Order of Dismissal for LOJ identifies the reason for the dismissal and will also identify if a tax or penalty adjustment must be made. The APS TE will identify the reason for the dismissal and follow the instructions below to close ACMS and resolve the taxpayer’s account. Reasons for Dismissal:
✓ Petition Filing Fee Not Paid
✓ Petition Filed Late
✓ Petition No Change Certification

If the case was dismissed because the petition was not timely filed or because the petitioner did not pay the filing fee:

When the SND has been assessed for the full amount reflected on the SND, APS will abate the difference between the SND assessed amount and the lesser amount identified on the Order to Dismiss. APS will use CC: AMCLSA if AIMS controls are open, or use CC: ADJ54 if AIMS controls are not open.

When APS receives both an order to dismiss for LOJ along with the no change notification, APS will take the following actions:

Close the case following general closing instructions. In addition, the entries for Form 5403 are:

In cases where the liability in personal holding company tax has been established by a decision of the USTC, but deficiency dividends have not been paid and a Form 976, Claim for Deficiency Dividends Deductions by a Personal Holding Company, Regulated Investment Company, or Real Estate Investment Trust, has not been filed, APS will:

See the following IRM references for additional information:

When a delinquent return has been received the normal ASED is computed by adding 3 years to the Return Received Date. The normal ASED is suspended as of the date the SND is issued, until:

If the IRS or Appeals has issued an SND the case is finalized by one of the events listed below:

APS will document the CAR to state that they were not able to apply the Fed/State Disclosure guidelines to this case because the case is sealed.

Upon verifying that all adjustment have posted to the account, take the following actions to physically seal the case for transmission to campus files:

Prepare Form 3210/E3210 with the following exceptions:

The Tax Court may impose a penalty against a taxpayer not exceeding $25,000 under IRC 6673 (a)(1) if:

The IRC 6673 penalty is assessed on a CVPN module:

Since the IRC 6673 penalty is not associated with a particular tax year before the court, but instead is a sanction imposed by the court for groundless delay, the penalty is assessed using the month and the year of the Court's order imposing the IRC 6673 penalty.

If the CVPN account is not yet established, reference the following IRMs and take the appropriate action(s) to establish the CVPN account for assessment of the IRC 6673 penalty:

Process the CVPN assessment:

When an income tax case also contains an adjustment for the employee’s share of FICA tax, prepare two Form 5403s. The assessments are done separately because the 30-day interest free waiver period (agreement date) does not apply to the employee share of FICA tax. Prepare Form 5403 for the FICA tax assessment as follows:

Prepare Form 5403 for income tax assessment:

Form 941, Employer’s Quarterly Federal Tax Return, is filed by employers who withhold income taxes from wages or who must pay Social Security or Medicare tax. The type of tax reported on a Form 941 is also referred to as FICA tax and is posted to MF on MFT 01. FICA tax audit examination adjustments are documented on one or more of the following forms and included, as applicable, with the Employment Tax case closing package submitted to APS for processing and closing:

Individual Income employment tax and withholding adjustments are reported by the taxpayer on their Form 1040 and/or attachment:

FICA tax adjustments (MFT 30 or MFT 01) are not subject to deficiency procedures under IRC 6211 - IRC 6215 which apply to Income, Estate and Gift taxes imposed by subtitles A and B and Excise taxes imposed by Chapters 41, 42, 43, and 44 nor under IRC 6212 which applies to the same tax types identified for IRC 6211. For this reason, the ATE will request APS process the individual taxpayer FICA tax adjustments types (Schedule H, Tip Income Tax, Employee Share of FICA) as interim action partial assessments).

When assigned to process an Employment Tax MFT 01 non-docketed closing, the APS TE will prepare Form 5403 for each Quarter reflected on the Form 4668 by entering the appropriate tax, penalty, credit reference codes, item reference codes, and amount(s) on Form 5403 for all increases or decreases in FICA-related adjustments (Social Security and Medicare Tax) reflected on Form 4668. See IRM 8.20.7-1 Exhibit Table, Form 5403, FICA Tax MFT 01 Item 12 and Item 15 Entries for details covering Tax/Pen/Int adjustments and CRN and IRN codes, and Form 4668 for specific details and explanations.

See the table below for additional FICA Tax adjustment information and details:

Prepare Form 5403 following general closing instructions. In addition:

See the following references for additional information:

Prepare Form 5403 as follows:

Upon resolution of a docketed estate tax or docketed gift tax case on which IRC 6161 is applied, the APS TE will:

APS will update ACMS using the cc provided on the E-5402 (Printable View):

APS will update ACMS using the cc provided on the E-5402 (Printable View):

The APS TE will use IAT Tool Fill Forms to prepare Form 2275 to re-charge the case to the Advisory employee identified by the ATE, see the address below:

To properly close estate tax cases, it is important to understand the definitions of net deficiency/overassessment and gross deficiency/overassessment:

When closing a net deficiency estate tax case, show the "net" deficiency in Item 12 of Form 5403 if either of the following two situations exists:

Appeals will expedite the closing of a certain "agreed and unpaid deficiency" or overpayment case, if the case meets the "large dollar" criteria described in IRM 8.2.1.10.1, Expedite Processing for Certain Large Dollar Cases.

To close the case, APS will:

Appeals will expedite the closing of a certain "agreed and unpaid deficiency" or overpayment case, if the case meets the "large dollar" criteria. For additional information, see IRM 8.2.1.10.1, Expedite Processing for Certain Large Dollar Cases.

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The APS TE will take the following actions to process a Dyed Fuel and Refusal penalty case assigned to them on ACMS: