4.4.5 Closings to Appeals18.104.22.168 Overview22.214.171.124 Form 5344, Examination Closing Record and Form 5403, Appeals Closing Record126.96.36.199.1 Form 5344 - Group Responsibility188.8.131.52.2 Form 5344 - Technical Services Responsibility184.108.40.206 Non-Docketed Cases - Group Responsibility220.127.116.11.1 Electronic Prints of Returns18.104.22.168 Special Situations22.214.171.124 Skeletal Records126.96.36.199 Non-Master File (NMF) Returns188.8.131.52 Closing Related Cases to Appeals - Technical Services Responsibility184.108.40.206 Closing Reference Returns to Appeals (Nontaxable Returns Only) - Technical Services Responsibility220.127.116.11 Unagreed But No Tax Consequence (Taxable Returns Only) - Technical Services Responsibility18.104.22.168 Claims for Refund or Abatement22.214.171.124.1 Form 5344, Group Responsibility126.96.36.199.2 Form 5344, Technical Services Responsibility188.8.131.52 Closing Cases to Other Appeals Offices - Technical Services Responsibility184.108.40.206.1 LB&I, International, Campus Cases220.127.116.11 Closing IRC 6707A, Failure to Include Reportable Transaction Information with Return Penalty Cases to Appeals, 18.104.22.168 Forward Case File to Appeals, Technical Services Responsibility22.214.171.124 Docketed (Petitioned) Cases, Technical Services Responsibility Part 4. Examining ProcessChapter 4. AIMS Procedures and Processing InstructionsSection 5. Closings to Appeals 4.4.5 Closings to Appeals Manual Transmittal December 20, 2012 Purpose (1) This transmits revised IRM 4.4.5, AIMS Procedures and Processing Instructions, Closings to Appeals Material Changes (1) This IRM was revised as follows: IRM Reference Description of Change Title of IRM The title of this IRM was changed from "AIMS/Processing Handbook, Closings to Appeals" to "AIMS Procedures and Processing Instructions, Closings to Appeals." IRM 126.96.36.199 Updated to clarify IRM instructions for Examination and Technical Services when closing cases to Appeals. IRM 188.8.131.52(2) Added this paragraph to advise of the requirements for sending short statute cases to Appeals. IRM 184.108.40.206. Clarified the importance of accuracy needed when completing Form 5344, Examination Closing Record. IRM 220.127.116.11.1 New section added to clarify group responsibilities for completing Form 5344. IRM 18.104.22.168.2 New section added to clarify Technical Services responsibilities for completing Form 5344. IRM 22.214.171.124 Retitled and provided instructions for Non-Docketed Cases. IRM 126.96.36.199 Retitled and added information for special situations requiring original returns. IRM 188.8.131.52 Retitled and added information for processing skeletal records. IRM 184.108.40.206 Retitled and added information on non-master file transcripts. IRM 220.127.116.11 Retitled and added references from IRM 4.8.2, Technical Services, Case Processing and IRM 4.10.8, Report Writing. IRM 18.104.22.168 Retitled and clarified procedures for closing reference returns to Appeals. IRM 22.214.171.124 Retitled and updated instructions. IRM 126.96.36.199 Retitled and updated instructions. IRM 188.8.131.52 Retitled and updated instructions. IRM 184.108.40.206 New section added to provide instructions on closing IRC 6707A cases. IRM 220.127.116.11 New section added to provide Technical Services responsibility for closing case files to Appeals. IRM 18.104.22.168 New section added to provide updated IRM reference for docketed (petitioned) cases. Effect on Other Documents IRM 4.4.5, dated 7/11/2005 is superseded. AudienceLarge Business and International (LB&I), Small Business and Self Employed (SB/SE), Wage and Investment (W&I) and Appeals employees. Effective Date(12-20-2012)Signed by Samuel PerdueDirector, Business Re-EngineeringSmall Business/Self-Employed 22.214.171.124 (12-20-2012) Overview This IRM provides instruction for the Examination and Technical Services employees on closing various types of cases to Appeals. Returns with less than 180 days on the statute cannot be closed to Appeals see IRM 126.96.36.199.1, Appeals Case Processing Manual, Processing and Establishing New Receipts. The statute date must be extended or updated to the appropriate alpha code. 188.8.131.52 (12-20-2012) Form 5344, Examination Closing Record and Form 5403, Appeals Closing Record Form 5344 must be properly completed by the groups before closing the case to Technical Services. Form 5344 is used to enter information into the Automated Information Management System (AIMS) that records the results of the audit before the case file is transferred to Appeals. It is very important that the group maintain the accuracy of the AIMS data with respect to the statute date, source code, status code, etc. Accuracy prevents the case from being rejected and returned to the group before it is closed to Appeals. Form 5403, is used by Appeals to enter information into the AIMS system upon completion of the case. Appeals must also ensure the form is completed accurately. 184.108.40.206.1 (12-20-2012) Form 5344 - Group Responsibility Form 5344 is generated automatically by the Report Generation Software (RGS) for Form 1040 , U.S. Individual Income Tax Return, Form 1120 , U.S. Corporation Income Tax Return, Form 1120-S , U.S. Income Tax Return for an S-Corporation, and Form 1065 , U.S. Return of Partnership Income. For Forms 5344 that are not generated automatically, see "5344 Entries, Area of Responsibility " at http://mysbse.web.irs.gov/exam/mis/data/25823.aspx See IRM 4.4.12, Examined Closings, Surveyed Claims and Partial Assessments, for instructions on the completion of Form 5344. Caution: When there is a 30-Day Letter or a Statutory Notice of Deficiency (90-Day Letter) for over $100,000 on a C-corporation, the additional 2% interest should be considered. If the case is going from Exam to either Appeals or Tax Court, Item 03 and 04 of Form 5344/5403 should be completed. In Item 03, enter the earlier of the 30 or 90-Day Letter Date, and in Item 04, enter only the tax amount which is over $100,000 (after 1997). These entries will generate a Master File Status of 30 on TXMOD located in the history item section. This is only an information item and does not generate a “trigger” or “2% interest” date. Do not make an entry in Item 05 (2% Interest Date) for cases closed to Appeals/Tax Court. When a final assessment is made (Form 5344/5403) and the additional 2% interest applies, a manual computation and restriction of interest is required. An Item 05, 2% date is required along with TC 340 for the manual computation and restriction of interest. The date entered in Item 05 will be the start date of the additional 2% interest (which is 30 days from the 30 or 90-Day Letter Date if the deficiency was not full paid). This date posts to TXMODA as “2% INT” date and on BMFOLT as the “trigger” date. See IRM 20.2.5, Interest on Underpayments. 220.127.116.11.2 (12-20-2012) Form 5344 - Technical Services Responsibility The original Form 5344 remains in the case file sent to Appeals. The IDRS terminal will accept closings to Appeals even though a partial assessment has been made and assessment verification is still pending on AIMS. Technical Services should review the document titled Form 5344 Entries, Area of Responsibility. Note: Technical Services will also review the entire completed Form 5344 to ensure accuracy. It is very important that Exam maintains accuracy of the AIMS/ERCS data with respect to the statute date, source code, status code, etc. Technical Services should not complete any missing exam blocks. Contact should be made with the group to retrieve the missing information to ensure accurate AIMS results . 18.104.22.168 (12-20-2012) Non-Docketed Cases - Group Responsibility Taxpayer requests for Appeals consideration will be acknowledged at the group level via Letter 2280, Transfer to Appeals. The case file will be identified as "Unagreed to Appeals" by attaching and completing Form 3198, Special Handling Notice for Examination Case Processing. The group will update ERCS to Status Code 21, In-Transit to Technical Services, and update the Technical Service Code (TSC) . Forward the case file to the appropriate Technical Services office for closure to Appeals. The group will document the case file as to the date the case was forwarded to Technical Services and the date the Letter 2280 was sent to the taxpayer. Technical Services will be responsible for forwarding cases directly to Appeals within 10 calendar days of receipt via Form 3210 , Document Transmittal. Note: If the case file contains related returns that are agreed/no-changed that should ride along with the protested case to Appeals, the group will prepare Form 2275, Records Request Charge Re-charge, prior to sending the case file to Technical Services. Refer to IRM 1.15.4, Retiring and Requesting Records, for instructions on Form 2275 preparation. If the taxpayer submits a written protest after receiving a 30-Day letter and requests Appeals consideration, the case file and written protest will be transferred to the appropriate Appeals office. If only one protest is received, the entire case file, including the duplicate original preliminary notice of which no response was received, will be transmitted to Appeals by Technical Services. Update ERCS to Status Code 21 and update the TSC. In order to correctly route Appeals cases, visit "Appeals Case Routing Addresses and Instructions" at http://appeals.web.irs.gov/APS/caserouting.htm. 22.214.171.124.1 (12-20-2012) Electronic Prints of Returns A copy of a return, RTVUE, BRTVU or CDE, Compliance Data Environment, print can be used when closing docketed or non-docketed cases to Appeals. See IRM 126.96.36.199 , Technical Services, Statutory Notices of Deficiency, for instructions when tax returns are not available. A transcript of account must be attached to the electronic print of the return. If there is any difference between the tax shown on the electronic print and the transcript, the difference must be reconciled on a workpaper attached to the transcript. 188.8.131.52 (12-20-2012) Special Situations Appeals will accept copies of returns except in the following situations: unagreed civil fraud, jeopardy assessments, Joint Committee cases, or when a delinquency penalty is unagreed. Follow the procedures in IRM 184.108.40.206.3, Statutory Notices of Deficiency, IRM 220.127.116.11 and IRM 18.104.22.168.5 for instructions on securing original returns when necessary. Note: If the AIMS database is not able to be closed to Appeals pending receipt of additional information, input a "Q" freeze on the taxpayer module. 22.214.171.124 (12-20-2012) Skeletal Records When a case is urgently needed by Appeals but the account is not yet a full record on AIMS take the following actions: If the case is in the group, the group should place an AMDISA print in the case file reflecting the TC 424 skeletal record to indicate an AIMS opening was requested. Complete Form 3198 accordingly, update to Status Code 21 on ERCS with the applicable TSC and forward the case file to Technical Services Technical Services may send the case to Appeals pending full establishment of the return on AIMS. Maintain a copy of all necessary forms for IDRS input and update to Status 81 as soon as there are full AIMS controls. Either the group or Technical Services should monitor the case until the full account is established on AIMS. As soon as there are full AIMS controls, close the return and attach a print of the AMCLSE information or an AMDISA reflecting Status 81 and forward the information to the Appeals office to which the case was closed. 126.96.36.199 (12-20-2012) Non-Master File (NMF) Returns NMF returns closed to Appeals are processed in the same manner as masterfile cases with the exception of transcripts that may have to be requested from the Cincinnati Submission Processing Center. Contact your AIMS/ERCS analyst for assistance. Refer to the contact listing to locate your AIMS/ERCS Analyst. http://mysbse.web.irs.gov/exam/mis/contacts/default.aspx 188.8.131.52 (12-20-2012) Closing Related Cases to Appeals - Technical Services Responsibility Multi-year examination cases with different types of closures have special processing requirements within Technical Services. See IRM 184.108.40.206.4, Technical Services-Case Processing and IRM 220.127.116.11, Examination of Returns, Reporting Writing, for detailed instructions on processing these types of cases. For additional assistance you may need to contact the Headquarters AIMS analyst. 18.104.22.168 (12-20-2012) Closing Reference Returns to Appeals (Nontaxable Returns Only) - Technical Services Responsibility A nontaxable return may be a partnership return, Master file Tax Code (MFT 06), an S Corporation (MFT 02) or a trust (MFT 05). When the audit of a nontaxable return causes a tax adjustment on a taxable return, include the nontaxable (reference) returns in the closure package to Appeals. Complete Form 5344 in the following manner: Enter Disposal Code 07 in item 13. Enter the adjustment amount in item 34. If the assessment statute of limitations date (ASED) is less than 180 days, use the alpha code GG to update the statute date in the day field (04/GG/2013). 22.214.171.124 (12-20-2012) Unagreed But No Tax Consequence (Taxable Returns Only) - Technical Services Responsibility In some instances, such as a loss year return, the examination results in an adjustment to income but no tax. When closing these unagreed returns to Appeals follow the instructions below: Examiners and Technical Services staff will use the appropriate Disposal Code (07 or 11). Since there is no tax consequence, enter $1 in Item 18, "Unagreed Amount Appealed/Petitioned" of Form 5344 . Usually the previous or subsequent tax periods (carry-back/carry-forward) are also being closed to Appeals and they will contain the amount of the unagreed tax adjustment. If a carry-forward return has not been filed yet, but the taxpayer is appealing the adjustment to the loss year, the examination results will be $1 entered in Item 18 of Form 5344 . 126.96.36.199 (12-20-2012) Claims for Refund or Abatement Examiners and Technical Services will complete Form 5344 according to the instructions in IRM 188.8.131.52.1 and IRM 184.108.40.206.2. . 220.127.116.11.1 (12-20-2012) Form 5344, Group Responsibility Examiners must complete Form 5344 in the normal manner, with the following exceptions: Make no entries in Items 12 or 15 Enter Disposal Code 07 in Item 13 Enter -$1 (negative one dollar) in Item 18 For instructions on completing Items 18, 22, 23, and 24 when there are other adjustments or no other adjustments in addition to the claim or abatement, see IRM 4.4.12, Examined Closings, Surveyed Claims and Partial Assessments. 18.104.22.168.2 (12-20-2012) Form 5344, Technical Services Responsibility Enter the non-docketed Appeals office code in Item 16. Refer to Document 6209, IRS Processing Codes and Information, for the correct Appeals Office Code. Choose the appropriate blocking series. Use the document titled, Blocking Series at the AIMS/ERCS website, Blocking Series to verify the correct blocking series. Appeals will subsequently process these as examined cases, processing the claim or abatement on Form 5403. 22.214.171.124 (12-20-2012) Closing Cases to Other Appeals Offices - Technical Services Responsibility Occasionally, taxpayers will request their case be forwarded to an Appeals office that is not the regular designated Appeals office. The Appeals web site at Appeals Case Routing contains a guide, "Case Routing Addresses and Instructions" to help you determine where to forward the case. 126.96.36.199.1 (12-20-2012) LB&I, International, Campus Cases LB&I cases, International (PBC 315, PBC 316) cases, and Campus EGC 5XXX cases that become docketed may be closed directly to the Appeals office that has jurisdiction over the docketed case. 188.8.131.52 (12-20-2012) Closing IRC 6707A, Failure to Include Reportable Transaction Information with Return Penalty Cases to Appeals, There are special instructions on closing penalty cases to Appeals. See IRM 184.108.40.206 , Abusive Transactions, IRC 6707A Penalty for Failure to Include Reportable Transaction Information With Return,- Timely Appeals Requests, Overview for specific processing instructions on these cases.. 220.127.116.11 (12-20-2012) Forward Case File to Appeals, Technical Services Responsibility For guidance on assembly of cases to Appeals, refer to IRM 4.4.1 Exhibit 4.4.1-8, Case Assembly. Technical Services should attach a print of CC AMCLSE or AMDISA and the original Form 5344. All cases referred to Appeals will be handled in a priority manner and sent to the Appeals office within ten (10) calendar days, via Form 3210. At the end of each month, the tickler file maintained of Form 3210s will be checked for acknowledgements received. Follow-up action will be taken on any for which Part 4 of Form 3210 has been outstanding for 30 days or longer to determine whether the cases were received by Appeals or why Part 4 was not returned. When the Appeals acknowledgment copy is received from Appeals, destroy the suspense copy and replace it with the Appeals acknowledgment copy. The Appeals acknowledgment copy, will be retained for a minimum of one year from date of receipt and will be purged according to the business unit's regularly scheduled purge date. 18.104.22.168 (12-20-2012) Docketed (Petitioned) Cases, Technical Services Responsibility See IRM 4.8.9, Statutory Notices of Deficiency.