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4.13.7  Exhibits

Manual Transmittal

December 17, 2015

Purpose

(1) This transmits revised IRM 4.13.7, Audit Reconsideration, Exhibits.

Material Changes

(1) Exhibit 4.13.7-2 - Minor grammatical change.

(2) Exhibit 4.13.7-10 - Deleted Filing Status & Dependency Deductions chart, ENREQ chart, and added transaction codes.

(3) Exhibit 4.13.7-14 through Exhibit 4.13.7-26 - Deleted Exhibits.

(4) IPU 14U1295 issued 08-28-2014 Exhibit 4.13.7-2 - Corrected third paragraph concerning Area Office reconsideration routing.

(5) IPU 14U1295 issued 08-28-2014 Exhibit 4.13.7-3 - Deleted state alignment chart to campus. Routing based on TC 420 PBC and servicing campus.

(6) IPU 13U1711 issued 12-06-2013 Exhibit 4.13.7-1 - Removed contact information and added link to the information.

(7) IPU 13U1711 issued 12-06-2013 Exhibit 4.13.7-3 - Removed rows from the Realigned Area Table and made changes to State Alignment table.

(8) IPU 13U1711 issued 12-06-2013 Exhibit 4.13.7-4 - Removed contact information and added link to the information.

(9) IPU 13U0724 issued 04-11-2013 Exhibit 4.13.7-4 - Change in Austin's fax number.

(10) IPU 13U0568 issued 03-20-2013 Exhibit 4.13.7-6 - Clarified note and removed hard coded addresses.

(11) IPU 13U0399 issued 02-22-2013 Exhibit 4.13.7-4 - Edits to correct Fresno's fax number.

(12) Exhibit 4.13.7-4 - Edits to correct Andover stop number.

(13) IPU 12U1606 issued 09-21-2012 Exhibit 4.13.7-4 - Edits to SBSE telephone and fax contact information.

(14) IPU 12U0573 issued 03-09-2012 Exhibit 4.13.7-4 - W&I contacts mistakenly removed in IPU 12U0573, which was correcting the SBSE contact info. This update is putting the W&I contacts back in the exhibit.

(15) IPU 12U0573 issued 03-07-2012 Exhibit 4.13.7-4 - Updated contacts.

(16) IPU 11U1909 issued 12-07-2011 Exhibit 4.13.7-1, address change for International Returns with Form 2555

Effect on Other Documents

This material supersedes IRM 4.13.7 dated 12/31/2009.

Audience

Small Business/Self Employed and Wage and Investment Campus Compliance, Customer Account Services Employees, Appeals, TAS

Effective Date

(12-17-2015)


Scott E Irick
Director,
Examination/AUR Policy
Small Business/Self-Employed

4.13.7.1  (09-01-2006)
Exhibits

  1. This chapter contains all of the exhibits for the Audit Reconsideration Handbook.

Exhibit 4.13.7-1 
ASFR - Reconsideration Returns - Centralized Processing Sites

Addresses for Automated Substitute for Return (ASFR) Reconsideration Returns (Tax return filed after ASFR has made an assessment transaction code (TC) 290 with a TC 150 for $0.00) are available at Who/Where - ASFR - Reconsideration Returns - Centralized Processing Sites

Exhibit 4.13.7-2 
Routing of Campus Reconsideration Requests

Use this exhibit to identify the Primary Business Code (PBC), Filing Location Code (FLC) and the Employee Group Code (EGC) on an Integrated Data Retrieval System (IDRS) TXMODA screen.

If the receiving campus does not work the exam program, assessments originating in the campuses will be sent back to that campus. Refer to the Filing Location Code (FLC) and Employee Group Code (EGC) to determine the campus where the assessment originated.

Assessments made by an area office are sent to the servicing SB/SE campus based on the alignment to AIMS Principal Business Code (PBC) in the TC 420.

For more information refer to IRM 4.13.2.2 Function Responsible & Routing Instructions.

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Exhibit 4.13.7-3 
Routing of Area Office Reconsideration Requests (as of 10/01/2013)

  North Atlantic Central South Atlantic Midwest Gulf States
Area PBC 201 202 203 204 205
Servicing Campus BSC CSC PSC CSC MSC
           
  Western California Employment E & G Excise
Area PBC 206 207 212 213 214
Servicing Campus OSC OSC CSC CSC CSC
           
  International        
Area PBC 215        
Servicing Campus PSC        
           

Note:

Only cases that were previous NRP cases that have a source code 80 or 91 should be routed to the NRP Coordinators. All others should be routed to the Audit Recon/Claims Coordinators.

The Audit Recon/Claims Coordinators can be found at: Area Office/Campus Contacts.

The NRP coordinators can be found at: NRP Area Coordinators - Exam.

Exhibit 4.13.7-4 
Central Reconsideration Unit (CRU) Addresses

Central Reconsideration Unit (CRU) Addresses, Telephone and Fax Numbers are now listed at: Who/Where - Audit Reconsideration Requests - Central Reconsideration Unit (CRU) Addresses.

Exhibit 4.13.7-5 
Appeals Account Resolution Specialist

Contact the Appeals Account Resolution Specialist in Fresno at (559) 233-1267 to find out who worked the case in Appeals.

Exhibit 4.13.7-6 
Addresses for AUR Reconsideration Requests

The originating campus may be determined from the address in the upper left corner of the CP2000 (if available) or from the first two digits of the TC922 DLN. If the first two digits of the TC 922 DLN are 07, 08, 18 or 89 it is a W&I taxpayer. If the first two digits of the TC 922 DLN are 19, 28 or 29 it is a SB/SE taxpayer. Send the request to the Campus where the assessment originated. A listing of contact telephone numbers is available on SERP http://serp.enterprise.irs.gov/databases/who-where.dr/aur-recon.htm

Note:

Phone numbers on SERP are for internal contacts relating to AUR Reconsideration cases only. Route taxpayer phone calls to AUR toll free numbers. The W&I toll free number is 1–800–829–3009 for TC 922 DLN beginning with 07, 08, 18 or 89. The SB/SE toll free number is 1–800–829–8310 for TC 922 DLN beginning with 19, 28 or 29.

Exhibit 4.13.7-7 
Form 12249 Adjustment Document

This Form 12249 is prepared using the fields indicated, and outlined in Exhibit 4.13.7-8.

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Exhibit 4.13.7-8 
Completing Form 12249 (Adjustment Tag)

  1. Check "IDRS Adjustment" box.

  2. Employee Number - IDRS # of person inputting the adjustment.

  3. Input Date - Date of actual input.

  4. TIN- Taxpayer’s SSN.

  5. MFT - 30

  6. TX-PRD - Tax Year

  7. NM-CNTRL - Name Control.

  8. SEQ-NUM - 3 digit number. (i.e. 101, 102, etc. on Monday and 201, 202, etc. on Tuesday and so on). You cannot use the same number twice the same day.

  9. BLK - Blocking Series -

    • 00 – with original return

    • 05 – Adjustment made without original return

    • 18 – Adjustment made without original return (informs Files to pull original return to the adjustment).

    • 98 – Complete claim disallowance without original return (Certified Disallowance 105C Letter being sent)

    • 99 - Complete claim disallowance with original return (Certified Disallowance 105C Letter being sent)

  10. CORRESP-DT - Correspondence Date (MMDDYYYY). This date will print on a notice when it is generated resulting from a taxpayer's correspondence

  11. CASE STS-CD - C (for closed).

  12. IRS-RCVD-DT - received date.

  13. CRTL-CAT - RECN for audit recon.

  14. ACTIVITY - Issues of case (FS4/EIC, or EXEMPT/EIC, or FS2/EIC as Examples). 10 characters maximum.

  15. TC –Transaction Code - 290/291 (change to tax) or 290 for zero (No tax change)

    • 15a. AMT- Input appropriate amount. Must be input in dollars and cents format with commas and decimal points.

  16. TC– Transaction Code - 160/161, or 170/171 to address penalty if on account. TC 160 .00 or 170 .00 if not changing penalty.

  17. SRCE-CD Source Code- chooses the statement which will appear on the taxpayer’s adjustment notice with the literal reason code (RC) completing the statement.

  18. RSN-CDS - Reason Codes: Maximum allowed is 3. Use reason code to designate item being adjusted and the audit recon reason code. Will determine the explanation that will print on the adjustment notice to the taxpayer.

  19. HOLD-CD - Hold Codes- Hold codes are entered to restrict offsetting, refunding and/or issuance of adjustment notices.

    Note:

    See Section 8C of Document 6209 for a list of hold codes.

  20. PRT-CD - Priority Code - Priority Codes are input to bypass certain unpostable checks. Failure to use the PC, when needed, will cause the transaction to unpost. When adjusting credits and there is a prior TC 30X/29X on the account, a PC 8 is needed.

  21. AMD-CLMS-DT - Amended claims date is used when an Overpayment results from a claim or amended return and the refund is not issued within 45 days of the received date. Credit interest is allowed from the received date to the refund date. Master file will use this date to apply the 45-day rule. This date should be used when the taxpayer initiates the adjustments resulting in a refund. Priority code 3 is used when IRS initiates the adjustment. Use the IRS received date.

  22. CD - Credit Reference codes. Maximum of 8.

    • 22a. If the credit reference or item reference amount is being decreased enter a minus. Do not reduce Taxable Income below 0.

  23. REMARKS – Y- SD if adjustment goes to files, NSD if it is not going to files.

  24. REMARKS - generally should match the Activity code Leave notes for other transactions needed (ENMOD changes, add telephone #s, remove STAUP/TC 470) to instruct for the person inputting the adjustment.

  25. RFSCDT – (MMDDYYYY) Refund Statute Control Date is used when the RSED (Refund statute expiration date) has expired (return due date plus 3 years). Override indicator code "S" must be present on applicable tax decrease.

  26. Override Code – An "R" is necessary if the rec’d date of the correspondence is more than 1 year old. Use "S" if the current date is later than the RSED and the RFSCDT field is used.

Exhibit 4.13.7-9 
ADJ54 Format

This screen print of an ADJ54 screen identifies the fields that are optional or that need to be entered. Exhibit 4.13.10 provides the valid entries for each field.

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Exhibit 4.13.7-10 
Adjustment Items Job Aid

This is not all inclusive. See Document 6209 for additional information.

Reason Codes Transaction Codes
01 Filing Status to Single 150 Tax on original return
02 Filing Status to MFJ 166 Computer generated Delinquency Penalty
03 Filing Status to MFS 176 Computer generated Estimated Tax penalty
04 Filing Status to HOH 196 Computer generated interest
05 Filing Status to Qualifying widower with child 290 Increase in tax manually
06 Exemptions 291 Decrease in tax manually
30 Adjustments to Income 300 Increase in tax after Examination
32 Adjusted Gross Income 301 Decrease in tax after Examination
75 Taxable Income 336 Interest assessed on additional tax
92 Standard Deductions 340 Manual computation of interest
44 SE Tax 341 Manual abatement or reduction of interest
49 Advanced EIC 342 Reverses restriction of interest
36 Tax Credits 420 Examination opened
51 Federal Income Tax Withholding 421 Examination closed
53 EIC 424 Examination requested
54 EIC Disallowance 706 Credit applied from another year
55 Excess SS tax and RR tax Withheld 826 Credit applied to another tax year
64 Audit Recon-No Response  
66 Audit recon-Fully Disallowed  
67 Audit Recon- Partially Disallowed  
68 Audit Recon- Fully Allowed  
Reference Codes
336 Additional Child Tax Credit
680 Accuracy related. Becomes TC 240
764 Earned Income Credit
765 Earned Income Credit (decrease)
766 Substantiated Credit (increase)
767 Substantiated Credit (decrease)
768 EIC allowed by computer (original processing)
806 W-2 Withholding (Credit)
807 W-2 Withholding (debit)
878 Adjusts Primary Self-Employment Income
879 Adjusts Secondary Self-Employment Income
881 Total Positive Income
885 Advance EIC
886 Taxable Income (– sign decreases income)
887 Number of Exemptions example: .01 to increase .01- to
888 Adjusted Gross Income Adjustment
889 Self-Employment Tax Adjustment
895 Primary Medicare Income
896 Secondary Medicare Income
Blocking Series
00 With Original Return
05 Full Allowance
18 Refile DLN without Original Return (Use when associating the document with the original return is important.)
98 Complete claim disallowance 105C without Original Return
99 Complete claim disallowance 105C with Original Return
HOLD CODES
HC 1 Stops refund, mails adj. notice.
HC 2 Holds notice and credit.
HC 3 Stops adj. notice, allows refund.
HC 4 Stops notice forever stops refund.
HC 0 Use when not using any other HC. Allows notices and refunds to be sent.
IDRS STATUS - CC STAUP
19/21 Initial Notice
20 501 Notice
56 503 Notice
58 504 Notice
22/24/26 TDA Status
Priority Codes
PC 1 Used with an L freeze when both PC1 and PC8 are needed.
PC 3 Use when considering the 45- day interest-free period.
PC 5 Use with TC 290.00 to force post accruals of unrestricted interest and/or FTP penalty
PC 8 Use when inputting an adjustment within $10.00 of a prior adjustment, when EIC is increased or when adjusting W/H and TC 17X is posted.

Exhibit 4.13.7-11 
Form 8758 Excess Collections & Instructions

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Exhibit 4.13.7-12 
Audit Reconsideration First Read Checksheet

This sheet should be prepared for each Audit Reconsideration received and worked by the first read examiner.

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Exhibit 4.13.7-13 
Audit Reconsideration of Assessments Made by Appeals Processing Unit

Don't automatically send audit reconsideration requests on closed Appeals cases to Appeals. Some reconsideration requests should go to Appeals. Some should be routed to the originating function that made the adjustment – AUR, ASFR, Exam, etc. Some must be rejected because the Appeals closure was final. It depends on how Appeals closed the case.

  1. Send the audit reconsideration request directly to Appeals when:

    • The TP agreed with the Appeals finding and signed agreement form 870. (Appeals closing code 03 or 04.)

      Note:

      Appeals also uses closing code 03 on closures with Form 870-AD or Form 906 (Closing Agreements of Final Determination of Tax Liability) or 866 (Agreement as to Final Determination of Tax Liability). Don’t send audit reconsideration requests on these cases to Appeals. (Refer to IRM 4.13.1.8.(1) b. through f.) Follow the instructions in #3 below.

    • Appeals issued a Statutory Notice of Deficiency but, the TP did not respond so Appeals defaulted the notice and assessed the tax. (Appeals closing code 05)

      In these cases, when you forward the audit reconsideration to Appeals, send the TP letter 916C and select the optional paragraph that reads:

      "Thank you for your audit reconsideration request dated ______. Appeals previously considered and closed your case. We are forwarding your audit reconsideration case to the Appeals office located at _________________________ . You should hear from them within 90 days."

  2. Don’t send the audit reconsideration request to Appeals – but route it to the originating function that made the initial determination (AUR, ASFR, Exam, etc) when:

    • The case was docketed in Appeals and the Tax Court dismissed the TPs case for Lack of Jurisdiction. In these cases, Appeals had no involvement with the issue and Appeals processing input the adjustment per the Statutory Notice of Deficiency for Area Counsels’ office. (See IRM 4.13.1.8(1)f and g.) (Appeals closing codes 08, 11, or 21.)

      In these cases, send the case to the appropriate originating function and send the TP letter 916C and select the optional paragraph that reads:

      "Thank you for your audit reconsideration request dated ________. We are forwarding your case to_________________ for consideration. You should hear from them within ___days."

  3. Deny the TPs audit reconsideration request when the case was previously in Appeals and the Appeals determination was final or the Tax Court entered a final decision. This would include cases closed as follows:

    • With a decision document secured in a case docketed before the United States Tax Court. (Appeals closing codes 08, 10, or 21).

    • A decision made by the Court in a case that went to trial. (Appeals closing code 17).

    • A dismissal by the Tax Court due to Lack of Prosecution. (Appeals closing code 12).

      In these cases send the TP letter 916C and select the optional paragraph that reads:

      "The Appeals Office or the Tax Court previously considered the examination of your tax return at your request. The Appeals Office or the Tax Court closed that examination based on the last examination report you received. That determination was final and we cannot reopen or reconsider your case."


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