4.7.3 Statute of Limitations

Manual Transmittal

May 16, 2019

Purpose

(1) This transmits a revision of IRM 4.7.3, Examination Returns Control System (ERCS), Statute of Limitations.

Material Changes

(1) Internal controls were added to this IRM per IRM 1.11.2, Internal Revenue Manual (IRM) Process.

(2) References to group manager, support manager, and acting manager were all changed to manager.

(3) References to secretary were changed to administrative support personnel.

(4) References to examiner were changed to technical employee.

(5) References to log book were changed to log file to be consistent with IRM 25.6.23, Examination Process - Assessment Statute of Limitations Controls.

(6) Significant changes to this IRM are reflected in the table below.

Original Reference New Reference and Description
IRM 4.7.3.1 Revised title from "Introduction" to "Program Scope and Objectives" to properly reflect the internal controls now contained in this subsection. Added new content to describe the internal control framework required by IRM 1.11.2.2.5, Address Management and Internal Controls.
IRM 4.7.3.1 (3) Incorporated into IRM 4.7.3.1 (1)
IRM 4.7.3.2 (2) Revised to clarify which option to use to update the "Date Returned" with the date the manager initialed the Form 895.
IRM 4.7.3.2.1 (1) Added that timely generally means two days from notification. Added that "notification" could mean either a message on the screen or a verbal message from the user.
IRM 4.7.3.2.1 (3) Incorporated into IRM 4.7.3.2.1 (2). Added that area analysts monitor statute controls.
IRM 4.7.3.2.1 (7) Moved to IRM 4.7.3.2.1 (6). Changed requirement for Form 895 from the manager has to sign it to the manager has to initial the form to match the IRM 25.6.23.6.3 requirement.
IRM 4.7.3.2.2 (2) Added a reference to IRM 25.6.23 for procedures to update Form 895 if the ASED changes.
IRM 4.7.3.2.2 (3) Incorporated paragraph (3) into (1).
IRM 4.7.3.2.3 (1) Added the administrative support personnel has the responsibility to forward the Form 895 to the appropriate individual for completion.
IRM 4.7.3.2.3 (3) Changed immediately to timely and qualified timely is generally the same day.
IRM 4.7.3.2.3 (7) Added if the Form 895 on the case file is subsequently updated, all copies of the Form 895 must be retained in the log file.
IRM 4.7.3.3, Permissions Removed. Covered in IRM 4.7.2.3.2, Permissions. Replaced with new section, ASED Requirements, IRM 4.7.3.5.
IRM 4.7.3.4, Approval Authority on ERCS Replaced with IRM 4.7.3.6, Approving the ERCS ASED.
IRM 4.7.3.4 (2), (3), and (4) Incorporated into IRM 4.7.3.6 (1).
IRM 4.7.3.4 (5) Renumbered IRM 4.7.3.4 (2).
IRM 4.7.3.5, Comparing the ASED on AIMS and ERCS Moved to IRM 4.7.3.4.
IRM 4.7.3.5 (7) Deleted and incorporated into a bullet under IRM 4.7.3.5 (6).
IRM 4.7.3.5 (8) Moved to a note under IRM 4.7.3.5 (6).
IRM 4.7.3.6, Updating the ERCS ASED Moved to IRM 4.7.3.5. The paragraphs in this section were reordered.
IRM 4.7.3.6 (2), (3) and (4) Incorporated into IRM 4.7.3.5 (1).
IRM 4.7.3.7, Form 895 Requirements Move to IRM 4.7.3.8.
IRM 4.7.3.7 (2), (4) and (5) Incorporated into IRM 4.7.3.8 (1).
IRM 4.7.3.7 (2) IRM 4.7.3.8 (2). Added collateral returns can be included when generating Forms 895.
IRM 4.7.3.7 (4) IRM 4.7.3.8 (4). Added both the prior and the current ASED are used to determine if a Form 895 is required when there is an ASED update pending managerial approval.
IRM 4.7.3.7 (8) Deleted. It is not a requirement.
IRM 4.7.3.8, Statute Reports Moved to IRM 4.7.3.7. Added an overview of this section. Added a new report, the AIMS-ERCS Statute Report. Removed duplication covered in IRM 4.7.6, Reports.
IRM 4.7.3.9, Retention Requirements of Statute Related Management Information Moved to IRM 4.7.3.10.
IRM 4.7.3.10, Form 895 Log Book Moved to IRM 4.7.3.9, Form 895 Log File. This section was outdated so it was completely revised to meet current requirements.

(7) Minor editorial changes have been made throughout this IRM. Some items were reworded for clarity. Also, website addresses and IRM references were reviewed and updated, as necessary.

Effect on Other Documents

IRM 4.7.3 dated 1/26/2010 is superseded.

Audience

Small Business/Self Employed (SB/SE), Large Business & International (LB&I), and National Headquarters employees in Return Preparer Office (RPO), Whistleblower Office, and National Research Program (NRP) who use ERCS.

Effective Date

(05-16-2019)

Robin L. Kidwell
Director, Technology Solutions
Small Business/Self Employed

Program Scope and Objectives

  1. This IRM section contains information regarding the establishment of and requirements for control of the assessment statute expiration date (ASED) for returns on ERCS.

  2. Purpose: To provide users the instructions to maintain ASED controls and monitor ASEDs on ERCS.

  3. Audience: These procedures apply to IRS employees in SB/SE, LB&I, and RPO who are responsible for statute controls and for monitoring or updating the ASED on returns on ERCS. Employees include managers, technical employees and administrative support personnel.

  4. Policy Owner: The SBSE Director Examination - Field and Campus Policy, who is under the Director, Headquarters Examination.

  5. Program Owner: SB/SE Director, Technology Solutions.

  6. Stakeholders: Large Business & International (LB&I), and National Headquarters employees in Return Preparer Office (RPO), Whistleblower Office, and National Research Program (NRP) who use ERCS.

Background

  1. Updating and controlling the ASED on ERCS is essential in ensuring there is no loss to the taxpayer or the government from erroneous abatements or barred assessments. To ensure the accuracy of the ERCS data on reports, it is imperative for users to verify the ERCS ASED is correct and updated timely.

Authority

  1. IRM 25.6.23, Examination Process-Assessment Statute of Limitations Controls.

Responsibilities

  1. Responsibilities of managers in regards to statute control for returns under his or her jurisdiction include, but are not limited to:

    • Ensuring the correct ASED is properly reflected on the case file and on ERCS.

    • Ensuring the correct ASED is on Form 5345-D, Examination Request-ERCS (Examination Returns Control System) Users, when reviewing the form to add a return to ERCS.

    • Ensuring Form 5348, AIMS/ERCS Update (Examination Update), is completed, reviewed and signed for ASED updates.

    • Processing (approving or disapproving) all ASED updates on ERCS timely.

    • Ensuring Forms 895 are generated and returned timely.

    • Monitoring the ERCS statute reports.

    .

    Note:

    In the absence of administrative support staff the manager has the responsibility to see that the administrative duties are completed.

  2. Responsibilities of the technical employee in the group or function in regards to statute control for all returns in the employee's inventory include, but are not limited to:

    • Ensuring the correct ASED is on Form 5345-D, Examination Request-ERCS (Examination Returns Control System) Users, when completing the form to add a return to ERCS.

    • Ensuring the correct ASED is properly reflected on the case file and on ERCS.

    • Ensuring Forms 895 are checked for accuracy, signed, and returned to the manager for review within 10 calendar days of generation.

    • Ensuring returns requiring a Form 895 have a managerial approved form on the case file.

  3. Responsibilities of administrative support personnel in the group or function in regards to statute control include, but are not limited to:

    • Ensuring the correct ASED is properly reflected on the case file and on ERCS.

    • Generating Forms 895 and forwarding to the appropriate individual for completion.

    • Updating ERCS to indicate when the Forms 895 have been signed by the manager.

    • Providing the manager with the ERCS statute reports.

    • Maintaining the Form 895 log file.

Program Management and Review

  1. ERCS provides ASED controls (Form 895 controls) and reports (Pending Statute Report and 895 Report) for all levels of management within the area or practice area. These controls and reports are used to monitor ASEDs to prevent a barred assessment that could result in loss of money to the Treasury. Refer to IRM 4.7.6, Reports, for the recommended usage of the ASED reports.

Program Controls

  1. ERCS contains security checks that restrict a user’s access to only what they need in order to perform their official duties and responsibilities. Refer to IRM 4.7.2 , Security for information and requirements to gain access to the ERCS system.

Acronyms

  1. The table below lists acronyms used in this IRM and their definitions.

    Acronym Definition
    AIMS Audit Information Management System
    AMDIS Command code used to display information about a tax return on AIMS
    ASED Assessment Statute Expiration Date
    CCP Centralized Case Processing
    DFO Director of Field Operations
    ERCS Examination Returns Control System
    FBAR Foreign Bank and Financial Account Report
    IDRS Integrated Data Retrieval System
    LB&I Large Business & International
    MF Master File
    MFT Master File Tax
    NRP National Research Program
    PSP Planning and Special Programs
    RPO Return Preparer Office
    SB/SE Small Business/Self Employed
    TIN Taxpayer Identification Number

Related Resources

  1. References related to this section include:

    • ERCS Group Handbook

    • ERCS Territory Handbook

    • ERCS PSP Handbook

    • ERCS Review Handbook

    • ERCS CCP Handbook

    • IRM 4.7.6, Reports

    • IRM 25.6.23, Examination Process-Assessment Statute of Limitations Controls

    • Penalty Codes for ERCS

ASED Control

  1. In the group or function, the manager and the revenue agent, tax compliance officer, tax examiner, or audit accounting aide, etc. (hereinafter referred to as technical employee) assigned control of the return are jointly responsible for the control of the ASED.

  2. When a Form 895, Notice of Statute Expiration, is generated on ERCS the "Date Issued" is set to today’s date. The "Date Returned" must be updated on ERCS to the date the manager initialed the Form 895. The "Date Issued" and "Date Returned" are used by area and headquarters analysts to monitor statute controls, so it is imperative ERCS is updated accurately and timely.

  3. Use the option "Acknowledge the Issuance or Return of a Form 895" to input a specific date for the "Date Returned" . The options "Correct a Single Tax Return" or "Correct Multiple Tax Returns" toggle the date returned indicator which sets the "Date Returned" to today’s date.

  4. These dates are displayed on the "Full Display of Multiple Returns" screen.

Manager

  1. All ASED updates on ERCS must be approved or disapproved timely. Timely is generally within two days of notification. Notification can be by an ERCS message when signing on or by notification from the ERCS user making the changes requiring approval.

  2. The ASED must be verified before approving a new requisition on ERCS. If the ASED is incorrect on a requisition, the manager should skip the return on the ERCS approval screen and instruct the administrative support personnel to update the ASED. The requisition can then be processed.

  3. When a return is received from the Campus or other function with an incorrect ASED, the manager is required to ensure a Form 5348 is completed. The manager is required to review and sign the form and give the form to the administrative support personnel to update the ASED on ERCS.

  4. Managers are required to ensure a completed Form 895 is attached to the case file for all returns requiring a Notice of Statute Expiration no later than 180 days prior to the ASED (120 days for Centralized Case Processing (CCP)). The ERCS 895 Report and the ERCS Pending Statute Report are used to monitor returns needing a Form 895.

  5. Once the Form 895 is generated, the manager is required to ensure the technical employee assigned control of the return completes the form and returns it to the manager for approval within 10 calendar days.

  6. When the manager receives the Form 895 from the technical employee assigned control of the return, the manager has an additional 10 calendar days (or 20 calendar days from the date the form was issued) to review the form for accuracy, initial it, and give it to the administrative support personnel for input into ERCS.

  7. When a prompt assessment ASED is input on ERCS, the manager is required to notify the administrative support personnel as soon as the update is approved so a Form 895 may be printed for the return.

  8. The manager is required to monitor the Statute Override Report to verify the ERCS ASED is correct.

Technical Employee

  1. If the ASED needs to be updated, the technical employee is required to prepare Form 5348 and give it to the manager for review and approval. If a Form 895 already exists for the return, the technical employee should follow the procedures in IRM 25.6.23, Examination Process-Assessment Statute of Limitations Controls, to update the Form 895.

Administrative Support

  1. When a return is received from the Campus or other function, the administrative support personnel or other receiving individual is required to verify the ASED. If the ASED is inaccurate, the return is to be given to the manager for appropriate action.

  2. After receipt of a signed Form 5348 from the manager for an ASED update, the administrative support personnel is required to timely update the ASED on ERCS. (Generally, for an ASED update, timely is the same day.)

  3. The administrative support personnel in each group or function must generate Forms 895 from ERCS with sufficient frequency to ensure that a completed Form 895 is in place no later than 180 days prior to the expiration of the ASED (120 days for CCP). For more information about returns requiring a Form 895, see IRM 25.6.23.4, Returns Subject to Statute Control.

    Note:

    If the local area office is using 210 days or more for their locally defined number of days and the 895 forms are generated monthly, ERCS ensures a Form 895 is generated for returns that have at least 180 days left on the ASED. The phrase "locally defined number of days" is explained in IRM 4.7.3.7 (2), Statute Reports.

  4. Upon receipt of the signed Form 895 from the manager, the administrative support personnel has 3 calendar days to initial and date the Form 895 and input the date the manager signed the form into ERCS. This is the "Date Returned" field on the ERCS system. See the "Correct or Display Records" chapter of the applicable ERCS User Handbook on the ERCS Documentation website for instructions on updating the "Date Returned" field on ERCS.

  5. The administrative support personnel has the responsibility to run the appropriate statute reports described in IRM 4.7.3.7, Statute Reports, and take appropriate actions.

  6. The administrative support personnel is required to place a copy of the completed Form 895 in the log file. If the Form 895 on the case file is subsequently updated, all copies of the Form 895 must be retained in the log file. See IRM 4.7.3.10, Retention Requirements, for the retention requirements of the copy of Form 895.

ASED Requirements

  1. IRM 25.6.23, contains rules for setting and using alpha ASEDs. Document 6209, IRS Processing Codes and Information, contains rules for setting ASEDs based on form numbers and Master File Tax codes (MFT)s. This section includes additional ERCS requirements.

  2. The following rules apply for setting or updating the ASED on ERCS:

    • When a return is requested or updated the ASED must be later than today.

    • A numeric ASED is required for returns with an MFT 03, a Source Code 31, and Push Code 051.

    • When a skeletal Audit Information Management System (AIMS) record is added to ERCS during AIMS to ERCS processing the ASED on the ERCS record is set using the MFT, activity code, and tax period based on a timely filed return.

      Note:

      AIMS does not carry an ASED until the return goes full.

    • When a full AIMS estate record is added to ERCS during AIMS to ERCS processing, the ASED is set based on the date of death.

      Note:

      AIMS skeletal estate returns cannot be added to ERCS because the date of death is not set until the AIMS record is fully established.

    • The numeric ASED must be within 210 days of expiration in order to update to an alpha ASED on AIMS and ERCS with the following exceptions: (1) Alpha Code EE, No Return Filed, (2) Alpha Code QQ, "Docketed Case" , (3) Alpha Code XX, ERCS Penalty Control where the penalty can be assessed at any time, and (4) Alpha Code ZZ, "AIMS Database Transfer – Temporary ASED Alpha Code" .

      Note:

      IRM 25.6.23 states the alpha code cannot be input until the ASED is within 180 days. However, AIMS and ERCS allow input when the ASED is within 210 days. This ensures statute controls are in place at 180 days.

    • Alpha Code AA, "Claim for Refund/Credit Only Issue" , is only valid if at least one of the following are true: (1) the Source Code is 30 or 73, (2) the Claim Amount is set, (3) the Aging Reason is 053, or (4) the MFT is an ERCS penalty MFT.

    • Alpha Code EE, is required on a requisition, if the Push Code is 021, 036 or 050.

    • Alpha Code XX is only valid on ERCS and only for penalty controls where the penalty can be assessed at any time. Refer to Penalty Codes for ERCS for information concerning penalty records that require an ASED.

    • Penalty ASEDs default to January 1st + 4 years past the tax year, except for MFT PX records which default to January 1st + 3 years past the tax year.

    • If the MFT is Y0, "Foreign Bank and Financial Account Report (FBAR)" , ERCS sets the default ASED to April 15th + 7 years past the tax year.

  3. The following rules apply to the statute restriction type:

    • AIMS and ERCS allow input of an R at the end of an ASED to indicate the ASED is restricted to a set of issues or flow through entities.

    • R is not valid with an EE alpha ASED.

    • R is not valid on the original ASED.

  4. The following rules apply for transfers:

    • There must be at least 210 days left on the ASED in order to transfer a return to LB&I.

    • There must be at least 210 days left on the ASED in order to transfer a return to SB/SE, Specialty, or the Campus if the Aging Reason is 053.

    • There must be at least 13 months left on the ASED in order to transfer a return to SB/SE, Specialty, or the Campus if the Aging Reason is not 053.

    • Alpha Code FF, "Reference Return" , is not valid for transfers to another area.

    Note:

    If the ASED does not have the required number of days/months left of the statute and the gaining office approves the transfer, the ASED is updated to Alpha Code ZZ which will allow the transfer.

    Note:

    When returns are transferred in the ERCS Utility Re-organization program, "Transfer Returns to another PBC" , these checks are by-passed on AIMS.

  5. The following rules apply for closings:

    • A return cannot be closed with a non-examined disposal code if the ASED is 872xxxx.

    • A return cannot be closed to CCP, Status 51, if the ASED is Alpha Code ZZ.

Comparing the ASED on AIMS and ERCS

  1. When a return is filed, the ASED is set on Master File (MF) based on the date the return was received by the Service. The MF ASED is sent to AIMS on the opening record.

  2. When a new requisition is established on ERCS or when collateral or penalty control records are added to ERCS, the ASED must be input at the time of the requisition.

  3. When the AIMS record changes from skeletal to a fully established record, the ASEDs on AIMS and ERCS are compared during the AIMS to ERCS processing. If the AIMS and ERCS statutes are different, the format for each ASED is checked and either AIMS or ERCS is updated.

  4. The following shows the priority order used to determine which ASED to keep, starting with the highest priority:

    • Type 872 statutes

    • Alpha statutes, excluding EE code

    • Irregular numeric ASEDs (irregular ASED is any statute other than an ASED set based on a timely filed return; includes prompt assessments and late filed returns)

    • Numeric ASEDs based on a timely filed return

    • EE alpha code

    Example:

    If ERCS has a numeric ASED and AIMS has an AA ASED the AIMS ASED overwrites the ERCS ASED. Conversely, if AIMS has a numeric ASED and ERCS has an AA ASED, ERCS sends an update to AIMS.

  5. If both AIMS and ERCS fall into the same priority, the ERCS ASED is kept unless both AIMS and ERCS have an irregular ASED, in which case the earliest ASED is kept.

  6. After the initial comparison of AIMS and ERCS, all subsequent ASED differences in the following weeks are resolved as follows:

    • If an ASED is updated on ERCS and the manager has not approved the update, no action is taken to resolve the AIMS and ERCS differences.

    • If an ASED is updated on AIMS, the AIMS ASED overwrites ERCS and the return is listed on the Statute Override Report.

    • If the ASED was updated on ERCS and the update is over 21 days old (indicating the initial update rejected), another update is sent to AIMS.

      Note:

      If a return is listed on the AAC Difference Report, differences between AIMS and ERCS are not resolved during AIMS to ERCS processing. AIMS assignee code (AAC) differences must be resolved timely to prevent delays in reconciling ASED differences between AIMS and ERCS.

  7. IRM 4.7.6.11, AIMS Error Reports, contains detailed descriptions of the reports mentioned in this section.

Updating the ERCS ASED

  1. If the ASED needs to be updated the group or function must immediately prepare Form 5348. The completed form and all documents necessary to support the ASED update are to be given to the manager for his or her written approval. After approval by the manager, the administrative support personnel must update the ASED on ERCS. Approval of the ERCS update is covered in IRM 4.7.3.6, Approving the ERCS ASED. After approval by the manager, the ASED updates are sent to AIMS. This is done daily by the AIMS/ERCS staff in each area.

  2. There are several reasons an ASED may need to be updated on the ERCS system. These include:

    • Updating to an alpha statute when the ASED on the return is within 180 days of expiration. (ERCS allows an alpha statute to be input if the ASED is within 210 days of expiration so the Forms 895 are printed with the alpha ASED.)

    • Updating to a ZZ alpha code in order to transfer a return out of the area.

    • Updating to a numeric ASED when a return has been transferred into the area with a ZZ ASED.

    • Updating the ASED after securing a Form 872, Consent to Extend the Time to Assess Tax.

    • Updating to a numeric ASED from a Alpha Code EE when a return is filed.

    • Updating to an earlier ASED after a request for a prompt assessment.

    • Adding the statute restriction indicator.

    • Correcting an incorrect ASED.

  3. Audit trails are created when the ASED is updated on ERCS.

  4. If the ASED is changed after a Form 895 has been generated, the Form 895 must be updated to the new ASED. Form 895 completion requirements can be found in IRM 25.6.23.

  5. The ERCS input screen for updating the ASED on ERCS can be found in the Correct or Display Records chapter of the ERCS User Handbooks.

Approving the ERCS ASED

  1. Users with write and approval permissions may update an ASED; however, they cannot approve their own updates. For example, ASED changes made by managers on ERCS must be approved on ERCS by the next higher level manager.

  2. When the manager approves a requisition, he or she is required to ensure the ASED is correct. There is a possibility that the ERCS ASED on a requisition may overwrite the AIMS ASED when the return is fully established on AIMS. Since the ERCS ASED is approved with the requisition, ERCS does not require the manager to approve the ASED a second time when the AIMS record is fully established, nor does ERCS notify the manager if the AIMS ASED is overwritten with the ERCS ASED. See IRM 4.7.3.4, Comparing the ASED on AIMS and ERCS, for a more detailed description of when the ERCS ASED overwrites the AIMS ASED.

    Note:

    The ASED on AIMS may be viewed using the Integrated Data Retrieval System (IDRS) command code AMDIS once the AIMS record is fully established.

Statute Reports

  1. The ERCS statute reports along with the AIMS Tables 4.0 and 4.1, Returns with Statute Date Pending, are designed to provide users with the necessary tools to monitor statutes, enforce statute requirements, identify potential issues, and ensure Form 895 procedures are followed timely. This section gives a brief description of the following statute reports on ERCS. Refer to IRM 4.7.6, Reports, for more detailed information about these reports:

    • 895 Report

    • AIMS-ERCS Statute Report

    • Pending Statute Report

    • Statute Override Report

  2. The 895 Report should be run at least monthly to monitor returns requiring a Form 895 and to ensure that each return in inventory has satisfied the statute control requirements. This report includes returns with expired and alpha ASEDs. Refer to IRM 4.7.6.7.1, 895 Report, for more information.

  3. The AIMS-ERCS Statute Report should be run weekly as the AIMS data is refreshed each week. The report lists returns where the AIMS and ERCS ASEDs differ or where the ASED may have a potential error. ERCS only returns, such as penalty controls or dropped AIMS returns, are not included on this report. Refer to IRM 4.7.6.7.2, AIMS-ERCS Statute Report, for more information about the types of statute issues included on this report.

  4. The Pending Statute Report from the Statute Expiration Reports under the ERCS Manager’s Reports menu should be run at least monthly. The report is used to monitor imminent statutes to ensure that ASEDs will not expire on returns controlled on ERCS. This includes returns not controlled on AIMS such as penalty records. This report may be run at the territory level. Refer to IRM 4.7.6.7.3, Pending Statute Report, for more information.

    Caution:

    The Pending Statute Report does not list expired ASEDs, alpha ASEDs, or irregular ASEDs unless the irregular ASED falls within the defined number of days. Some alpha ASEDs represent an underlying ASED that can expire (for example, BB, DD, or MM). Therefore, managers should be aware the Pending Statute Report does not provide data on all ASEDs which are expiring within the time frame specified when the report is run. Managers should use the 895 Report to identify alpha ASEDs expiring within a short period of time.

  5. The Pending Statute Report from the Territory Reports menu should be run at least monthly. It is used by Territory Managers, Directors of Field Operations (DFOs), Area and Practice Area Directors, and Planning and Special Programs (PSP) to monitor imminent ASEDs on returns. This report provides a count of returns by AAC expiring within 210 days grouped by number of days. There is an option to include a listing of returns with expired ASEDs and with ASEDs expiring within 30 days. Alpha ASEDs are not included on this report. Returns with irregular statutes are not included on the report, unless the ASED falls within 210 days. Refer to IRM 4.7.6.9.4, Pending Statute Report, for more information.

  6. The Statute Override Report from the AIMS Error Reports menu should be run weekly. It is used to alert the manager when the ASED on ERCS is overwritten by the AIMS ASED. See IRM 4.7.3.4 , Comparing the ASED on AIMS and ERCS, for details.

Form 895 Requirements

  1. Forms 895 are generated on ERCS for returns meeting one of the following conditions:

    • The ASED is expiring within a defined number of days.

    • The ASED is an alpha code, excluding ZZ, or an 872 type code.

    • The Alpha Code is ZZ and the calculated ASED based on a timely filed return is expiring within a defined number of days.

    Note:

    The defined number of days used to generate Forms 895 on ERCS for the group and PSP is set by each area or by LB&I. The number of days must be between 180 and 400 days. It is recommended it be set to 210 days to make sure all returns have at least 180 days left on the ASED when the Forms 895 are generated.

    Note:

    The defined number of days used to generate Forms 895 on ERCS for Technical Services is 210 days.

    Note:

    The defined number of days used to generate Forms 895 on ERCS for CCP is 120 days.

  2. The user may include collateral returns when generating Forms 895.

  3. Forms 895 may be required for returns even if the numeric ASED is not within 180 days (examples include returns with an executed consent and prompt assessments). See IRM 25.6.23.4, Returns Subject to Statute Control. ERCS only generates a form for numeric ASEDs that fall within the area defined number of days. If a form is required earlier, it should be generated using the ERCS option "Reprint 895 Forms by TIN, MFT and Tax Period" .

  4. If a return has a pending statute update, and either the prior ASED or the ASED pending approval meet the criteria for a Form 895, the form is generated.

  5. IRM 25.6.23 contains additional information regarding the maintenance of Forms 895 and the requirements for completion and return of the form.

Form 895 Log File

  1. The Form 895 log file is used to ensure statute control requirements are in place, to verify signatures on the forms for cases in current inventory, and as a reference for cases no longer in the group or function. The log file contains a copy of each managerially-approved Form 895 in accordance with the retention period outlined in IRM 4.7.3.10, Retention Requirements. Refer to IRM 25.6.23.6.2, Completion of Form 895 by Area Office Examiner or Specialist, for more information.

  2. The manager must have access to the Form 895 log file.

  3. It is recommended the forms be retained in statute expiration date order so the imminent statutes are on top. See IRM 25.6.23.7.2.2, Case Closing Functions Form 895 Statute Control File - Open Section.

Retention Requirements

  1. The retention requirements for the AIMS Tables 4.0 and 4.1 also applies to the following ERCS statute reports and forms:

    • The Pending Statute Report (group level)

    • The 895 Report

    • The Form 895 in the log file

  2. These documents are required to be destroyed after 5 years plus the current year, or after no further reference value, whichever is earlier. The copy of the Form 895 must be retained for a minimum of two years after the final closure from the group or function. Any time a case is returned to the group or function, the two year minimum retention of the copy of the Form 895 starts over when the case is subsequently closed.